Australia and New Zealand data review and preview

RBA minutes likely to be overshadowed by the upcoming CPI

In his recent speech, the Reserve Bank governor highlighted the upcoming board minutes, which are due Tuesday. The minutes are likely to suggest that the bank is happy with the fall in the AUD to date, and would be happier if the currency were to fall further. As for the assessment of the local economy, we doubt that there will be much change. However, the market may not react much to the minutes given that the focus has turned to the Q2 CPI, due 23 July, where unexpected softness could see the RBA act on its easing bias (the RBA’s forecast profile suggests that the bank expects underlying inflation to pick up from 0.4% in Q1 to 0.5% in Q2). In New Zealand, the Q2 CPI is due and we expect modest inflation, but the RBNZ is more concerned with the rapid growth in house prices, which are 9% higher than last year.

Read the full report: Economic Research



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