Via HSBC research, a note out overnight.

Most of the note was non-Australia related (I am surprised, is there anywhere else worth talking about? - ps. you know I'm biased, right?) but the Reserve Bank of Australia got a mention (bolding mine):

.... Australia released its mid-year fiscal update

  • Our economists note1 that the government's fiscal position is in a noticeably better position than at the May 2017 budget, with a projected deficit of just 1.3% of GDP for the current fiscal year (previously 1.6%).
  • The government expects to return to surplus in 2020/21.
  • One aspect of the government's projection that carries direct relevance for monetary policy is the assumption that rising economic growth will foster an acceleration in wages growth. We also expect this to be the case which is why we look for the first RBA hike to come in Q2 18, sooner than is currently priced in by the market.

HSBC note on the AUD in response ... that it was little changed despite the MTEFO update


Wage growth in Australia has been very slow, and is a key concern for the RBA. We still await an acceleration.