The next move in Australia's cash rate is still likely to be upward, although that does not rule out a cut if necessary, according to an RBA assistant governor.
Reserve Bank of Australia assistant governor Christopher Kent was asked at an event in Sydney about a recent shift by financial markets to price in a small chance of a rate cut next year following soft economic data.
Kent said the market move was "modest" and it was best not to overreact to one quarter's data.
The outlook for unemployment and inflation was still positive, although progress on reaching the bank's targets would likely be gradual, he said at the Bloomberg event.
Asked about the housing market, Kent said there was a risk that banks might tighten credit unnecessarily because of scandals engulfing the industry.
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