The Reserve Bank of Australia statement is due on Tuesday, 7 May 2024 at 2.30 pm Sydney time:
- 0430 GMT
- 0030 US Eastern time
I posted on Friday that all but one analyst of the 37 surveyed expect the Bank to remain on hold.
Capital Economics is opting for a 25bp rate hike:
- “Our forecast is a line ball call, but a 5 per cent chance is too low,”
- “Inflation is proving stickier and stronger than the RBA expected, and is on track to overshoot their target for four years, which is quite long.
- “The labour market and wages in the services sector risks keeping price pressures higher for longer.”
The article in the Australian Financial Review (gated) says
- The RBA has increased interest rates on seven occasions since 1999 when the trimmed mean quarterly inflation has been at least 1 per cent, as it was in the March quarter.
- Two exceptions were in the aftermath of the introduction of the 10 per cent GST in July 2000, when inflation and unemployment were rising, and in 2008 when global financial crisis storm clouds were brewing.
(Note that yes, the trimmed mean rose 1% q/q)
The article does say there was a third exception, “at the tail end of the pandemic in early 2022”.
FWIW I am with the consensus on this, the cash rate to be left unchnegd at 4.35% tomorrow.
AUD/USD is little changed on the session, up a few tics:
This article was written by Eamonn Sheridan at www.forexlive.com. Source