RBA: what are the upside risks? - Nomura
|Analysts at Nomura offered a review on the latest developments in the RBA's policy and main downside/upside risks.
Key Quotes:
"The central bank continues to balance growth, inflation and financial stability objectives."
"Its 6 February press release suggests increasing confidence in the global and local growth backdrop, and possible modest upward revisions to its domestic GDP forecasts.'
"However it still expects inflation and wage growth to rise only “gradually”. Moreover, with inflation below target over the past eight quarters and house prices continuing to soften a little, we expect it to continue to display patience, not hiking until February 2019."
"We also believe it remains mindful that Australia’s largest trading partner, China, is undergoing a delicate phase of deleveraging, and that medium-term risks from this source remain."
Risks: The main downside risks stem from domestic housing, the global market or a (medium-run) China dislocation. Higher commodity prices, stronger-than-forecast capex and infrastructure, and continued strong employment reports are upside risks."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.