Australia's weak building approvals won't sway RBA to cut rates: BBVA

Worries eased by improving China market.

Australia's building approvals surprised to the downside in December, falling by -4.4% m/m (consensus: +1.0%), from 2.9% the previous month, reports BBVA, but believes this is not enough to convince the central bank to cut rates.

"The soft data points to ongoing sluggishness in the domestic economy, adding to pressure on the RBA to continue cutting interest rates. We nevertheless expect the RBA to keep policy rates on hold tomorrow – a view now shared by the consensus -- in view of improving global prospects, especially in China, for which Australia depends heavily for its commodity demand. The RBA last cut interest rates by 25 bps in December, to 3.0%," said BBVA.