‘We see the RBA firmly on hold in coming months’ - HSBC

HSBC chief economist Paul Bloxham offers insights on the RBA’s monetary policy outlook for this year.

Key Quotes:

“We see the RBA firmly on hold in coming months. We see the risk to the cash rate outlook as highly asymmetric, given that the RBA's financial stability concerns mean the hurdle for a rate cut is very high. The question is not whether the RBA cuts, but when will it hike.”

“A clear point of focus will be the Q1 CPI print, which is due to be published on 26 April. We see underlying inflation remaining below the RBA's 2-3% target band but expect that it should be past the trough.”

“We see underlying inflation and wages growth gradually lifting in the second half of 2017 and the RBA lifting its cash rate in 01 2018. “