Reserve Bank of Australia Governor Bullock spoke earlier:
Bullock made mention that inflation will remain a crucial challenge over the next one to two years.
This was very much evident in the minutes to the November meeting released soon after Bullock spoke:
Bullock differentiated between supply issues and strong underlying demand:
- "We're going to see more potential for supply shocks...if you keep getting them, there comes a point where everyone just expects inflation to remain high and if inflation expectations adjust, then it's a problem"
Said that monetary policy was already restrictive and dampening spending. RBA minutes showed the RBA is concerned about a shift in inflation expectations higher, though, which triggered the rate hike in November.
AUD moved higher on the minutes and has taken fresh impetus from the much stronger mid-rate for CNY: