Analysts at Rabobank point out that the RBA left rates on hold at 1.50% yesterday as expected but added some key extra words to their copy-and-paste statement: “One continuing source of uncertainty is the outlook for household consumption”.
“Given household debt is now 194% of GDP, is that a surprise? Certainly it implies the RBA will not be following rapidly where the Fed still appear to be leading. That’s even more the case now that the geniuses at the ABS are about to revise the basket of goods and services for Aussie CPI (which they labour to produce all of four times a year), with strong suggestions that this will mean weaker prints going forwards. In which case, the AUD is going just the one direction. And it’s not up.”
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