The Reserve Bank of Australia (RBA) unexpectedly kept its cash rate at 4.25% today. Nonetheless, we continue to expect conditions outside of the resources sector to remain weak and, despite the recent improvement in global data, we think euro-zone tensions will increase again and that the world economy will disappoint this year. The upshot is that the RBA’s pause is unlikely to last for long. We have pencilled in a 25bp cut in May.