Earlier responses here: RBA meeting yesterday - responses

and RBA meeting yesterday - responses ... 2

This now via HSBC (in brief):


  • recent weak retail sales numbers
  • low Q3 CPI print
  • ABS announcement that the re-benchmarking of the CPI, due on 31 January, will knock around 0.2ppts off the CPI measure

.... the RBA continues to see things as remaining on track

It seems that the RBA has been reassured by the improving global economy and tightening local labour market

  • RBA forecasts are 'largely unchanged'
  • they still expect growth to pickup to an above trend pace
  • pointed out that the labour market is tightening up and is expected to drive 'some lift in wage growth over time'


  • 'likely to remain low for some time'
  • RBA's 'central forecast remains for inflation to pick-up gradually

As the RBA Governor stated at the parliamentary testimony, back in August, it is a 'reasonable assumption' that 'the next move will be up rather than down' but that 'it's quite some time away if things play out as we expect'.

  • Nothing since then appears to have pushed this view off track
  • although we will get more specific details in the official statement on Friday

In (HSBC's) view, the market pricing is too benign, with current pricing showing a cash rate hike is not fully priced until February 2019. We expect the tightening labour market will start to put some upward pressure on wages growth in coming quarters, which should support inflation, and that the RBA will want to start to head back towards neutral as soon as it is confident that underlying inflation is clearly on the path back to target