The Reserve Bank of Australia’s statement is expected on Tuesday, May 7, 2024 at 2:30 p.m. Sydney time:
- 04:30 GMT
- 12:30 a.m. US Eastern Time
I published on Friday that all but one of the 37 analysts surveyed expect the Bank to remain on hold.
Capital Economics opts for a rate increase of 25 basis points:
- “Our prediction is a line call, but a 5 percent chance is too low,”
“Inflation is proving more persistent and stronger than the RBA predicted, and is on track to exceed its four-year target, which is quite a long time.
“The labor market and wages in the services sector risk keeping price pressures high for longer. »
The Australian Financial Review (gated) article says
- The RBA has raised interest rates seven times since 1999, when reduced average quarterly inflation was at least 1 per cent, as in the March quarter.
Two exceptions occurred following the introduction of the 10 percent GST in July 2000, as inflation and unemployment rose, and in 2008, when the storm clouds of the global financial crisis were getting ready.
(Note that yes, the trimmed average increased by 1% q/q)
The article says there was a third exception, “at the end of the pandemic, in early 2022.”
FWIW I agree with the consensus on this, the spot rate should remain unchanged at 4.35% tomorrow.
The AUD/USD moved little during the session, up a few ticks:
cnbctv18-forexlive
