FXstreet.com (Barcelona) - According to the NAB Analyst Team, “Before today’s economic data release (generally considered soft by analysts expectations) we had expected the RBA to pause in February and then cut in March unless the inflation report showed surprisingly low inflation in the December quarter – that’s is precisely what we got today, inflation rounded down to 0.5% for the underlying rate.”

Indeed, “Given the low inflation outcomes, we concede that the balance of risks has shifted to a cut in rates in February. The market is pricing a 36% chance of a February cut after the CPI (from 34% earlier today). We think the market is significantly underpricing the risk at these levels.” the team adds.