The RBA reduced its pace to a 25 basis point increment in October, some desks had seen this as premature since the following inflation prints showed Australian consumer inflation accelerating, the trimmed mean measure jumped by 1.8% Q/q in Q3, this was faster than the median expectation of 1.3%. Despite the rise in inflation figures, the RBA scaled down its pace in late October, this left the Cash Rate at 2.85% The bank said it expects inflation to decline next year, its central forecast sits at 4.75% over 2023 and a little over 3% over 2024. On the growth front, the central bank expects the economy to expand by 1.5% in 2023 and 2024. The RBA said that the size and timing of tightening will depend on future CPI and jobs data. The desk at Wells Fargo sees the Cash Rate rising by 25bps to 3.10% in December, in line with market consensus. Analyst seem more divided for the March meeting, a Bloomberg survey ranges from rate cuts to 3.0% to additional hikes, ANZ expects the RBA to raise the Cash Rate to 3.60% by this time. Wells Fargo notes that Governor Lowe’s comments on a significant amount of tightening may signal that the bank is close to the end of its hiking cycle. The desk says that Gov. Lowe’s remarks on Australia’s soft landing are due to a less steep tightening pace and relatively contained wage growth. Lastly, we remind you this is the last time we will hear from the RBA until February 7th.
Comentarios