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RBA: Data not yet consistent with pause – ANZ

The Australian Consumer Price Index (CPI) missed market expectations as it headline inflation fell from 7.4% year-on-year in January to 6.8% in February. According to the economists of the ANZ bank, this fact will continue to support a rate hike at the RBA meeting next month.

The RBA will raise rates in April; inflation momentum remains strong

“Annual inflation fell to 6.8% yoy in February, below the peak of 8.4% yoy reached in December, confirming once again that we have surpassed the inflation peak in the fourth quarter“.

“Australia’s monthly CPI indicator showed that inflation momentum remains strong and is not slowing down as much as falling annual inflation would suggest. Along with the release of past data, this makes us feel comfortable with our forecast that the RBA will raise the cash rate 25 basis points at its April meeting.”

“Although the RBA has signaled its intention to pause sometime in the next few months, we continue to believe that data is not yet consistent with a pause.”

Source: Fx Street

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