RBA holds rates steady, softens hawkish tone on rates
Australian dollar falls, bond futures rally
Markets now see 57 for Feb easing, April cut fully priced

SYDNEY, Dec 10 Reuters Australia39;s central bank is getting closer to joining its peers in cutting interest rates, having sat tight for over a year now, but much will depend on the data to decide whether it can move as early as February.

Wrapping up its December policy meeting, the Reserve Bank of Australia kept the cash rate unchanged at 4.35 but softened its hawkish stance. The statement omitted a previous line that the RBA Board was not ruling anything in or out as well as policy needing to remain restrictive.

Recent data on inflation and economic conditions are still consistent with November forecasts, and the Board is gaining some confidence that inflation is moving sustainably towards target, the RBA Board said in a statement.

The Australian dollar fell 0.9 to 0.6380 and thereyear bond futures rallied 9 ticks to 96.289, the highest since October. Swaps now imply there is a 57 chance of a rate cut in February, with a first easing more than fully priced in by April next year.

Markets were poised for a steady outcome, but some had bet the RBA could take a dovish turn after data showed economic growth in the third quarter was surprisingly weak. Wage growth has also underwhelmed even though the labour market has shown resilience partly underpinned by rising public sector jobs.

When asked about the…