The Reserve Bank of Australia (RBA) left its policy rate unchanged at 3.0% today as expected. Despite rising business and consumer confidence, both ourselves and the RBA believe that the near-term outlook for business investment is weak and that the prospects for consumer spending are especially uncertain. Accordingly, we still see rates remaining on hold until Q1 2010 and then expect that the pace of tightening next year will be far slower than the markets have currently priced in.