22 Jan 2014
Flash: Risk of RBA rate cut fading - UBS
FXstreet.com (Bali) - According to Matthew Johnson, Rate Strategist at UBS, risk of a rate cut by the RBA is fading.
Key Quotes
"Some (components of the inflation reading) are likely to be temporary, other bits are likely to be more permanent."
"It makes it very hard to see the RBA lower rates, although with the labour market still soft and (there have not) really been any signs of wage inflation, I would be surprised to see a sustained pick up in core inflation."
"It's probably noise and it will come back... but the risk of a rate cut is fading. The main consequence is the risk of a rate hike possibly later this year or early next year is rising, but I see the RBA on hold this year."
Key Quotes
"Some (components of the inflation reading) are likely to be temporary, other bits are likely to be more permanent."
"It makes it very hard to see the RBA lower rates, although with the labour market still soft and (there have not) really been any signs of wage inflation, I would be surprised to see a sustained pick up in core inflation."
"It's probably noise and it will come back... but the risk of a rate cut is fading. The main consequence is the risk of a rate hike possibly later this year or early next year is rising, but I see the RBA on hold this year."