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21 Apr 2014
A high Aus Q1 CPI increases odds H2 2014 hikes by RBA - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, shares his thoughts on the upcoming Australian Q1 CPI due on Wednesday, noting that is will be of important influence on the RBA policy outlook.
Key Quotes
"The RBA has set an outlook for policy in its statements that suggests it is more than usual locked in to a steady rate outlook."
"As such, this data may have less than normal impact on their outlook especially for the next six months. However, it will still mean a lot for their policy outlook beyond that."
"A higher than expected number pushes inflation into an uncomfortably high place and should generate odds of a hikes in the second half of this year, more so in Q4, especially considering the strong housing market."
"A lower than expected number will push out potential for rate hikes and make the market wonder if it will be a long time indeed before a hike with the still yet to accelerate slowing in resource capital expenditure."
Key Quotes
"The RBA has set an outlook for policy in its statements that suggests it is more than usual locked in to a steady rate outlook."
"As such, this data may have less than normal impact on their outlook especially for the next six months. However, it will still mean a lot for their policy outlook beyond that."
"A higher than expected number pushes inflation into an uncomfortably high place and should generate odds of a hikes in the second half of this year, more so in Q4, especially considering the strong housing market."
"A lower than expected number will push out potential for rate hikes and make the market wonder if it will be a long time indeed before a hike with the still yet to accelerate slowing in resource capital expenditure."