The RBA will have plenty to think about tomorrow and whilst all 18 economists polled by Reuters suggested that there will be no rate cut, today’s domestic data would suggest that the decision may not be so clear-cut. The TD-MI gauge of Australian inflation showed that it fell to 1.8%, which is below the RBA’s target of 2%, and the very poor building approvals data will have the central bank worrying that the economy is way too reliant on commodities.
The official Chinese PMI data was unexpectedly good but private sector data from HSBC on PMI and exports, told an entirely different story, and as always with Chinese economic data it’s hard to know what to believe.
The RBA may well stand still again, but the subsequent statement may well be a little more ease-friendly!
