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28 Jan 2015
February probably too soon for the RBA to ease - Deutsche Bank
FXStreet (Bali) - According to Deutsche Bank, today's CPI shows nothing to change the assumption that February is probably too soon for the RBA to ease.
Key Quotes
"Trimmed mean at 0.7% qoq (DB 0.6% qoq, market 0.5% qoq), weighted median also at 0.7% qoq (DB and market at 0.5% qoq). But, downward revisions to Q3-2014 leave year-end prints at 2.2% for the trimmed mean and 2.3% for the weighted median - broadly consistent with the RBA's forecasts."
"To be sure the Q4-2014 'cores' are above our and market expectations, but when it comes to assessing the 'true' pace of underlying inflation we think the downward revisions to Q3 also need to be taken into account. The trimmed mean is now reported at 0.3% qoq in Q3 (originally 0.4% qoq), with the Q3 weighted median now 0.5% qoq versus the originally published 0.6% qoq."
"All up therefore, we would assess the 'true' pace of underlying inflation through the second half of 2014 as running around 2%, within the RBA's target band and consistent with the RBA's November SoMP forecasts."
"As for next week's RBA Board meeting, we see nothing in today's CPI to change our expectation that February is probably a little too soon to see the RBA ease."
Key Quotes
"Trimmed mean at 0.7% qoq (DB 0.6% qoq, market 0.5% qoq), weighted median also at 0.7% qoq (DB and market at 0.5% qoq). But, downward revisions to Q3-2014 leave year-end prints at 2.2% for the trimmed mean and 2.3% for the weighted median - broadly consistent with the RBA's forecasts."
"To be sure the Q4-2014 'cores' are above our and market expectations, but when it comes to assessing the 'true' pace of underlying inflation we think the downward revisions to Q3 also need to be taken into account. The trimmed mean is now reported at 0.3% qoq in Q3 (originally 0.4% qoq), with the Q3 weighted median now 0.5% qoq versus the originally published 0.6% qoq."
"All up therefore, we would assess the 'true' pace of underlying inflation through the second half of 2014 as running around 2%, within the RBA's target band and consistent with the RBA's November SoMP forecasts."
"As for next week's RBA Board meeting, we see nothing in today's CPI to change our expectation that February is probably a little too soon to see the RBA ease."