Breaking Market Wire, Asia Pacific

At its first meeting of 2024, and the first under the new ~6-weekly structure which also saw the bank release its latest economic projections, the RBA kept the cash rate steady at 4.35%. This was expected with more attention on the RBA’s updated reading of the macro landscape and its policy guidance. In the end the RBA played a rather straight bat by continuing to stress that “returning inflation to target within a reasonable timeframe remains the Board’s highest priority” and noting that “while recent data indicate that inflation is easing, it remains high”. With that in mind, in the...

The Q4 Australian CPI report negatively surprised. A welcomed development for indebted mortgage holders with the data further cementing the case for the RBA to keep rates steady for a while, and opening the door slightly more to the start of a gradual easing cycle later this year. Positive base-effects in things like food and petrol as last year’s larger increases rolled out of calculations, coupled with disinflation across ‘goods’ prices (thanks to weaker global demand and repaired supply chains), and government subsidies designed to artificially hold back rents and take the heat out of electricity costs pushed annual CPI...