### POV: AU CPI DATA SHOULD CEMENT RBA VIEW.....>

RBA: ### POV: AU CPI DATA SHOULD CEMENT RBA VIEW FOR THE TIME BEING

- Today's domestic CPI data will re-affirm the Bank's view that the next move in

the cash rate will likely be higher, and that there is no need for adjustments

in the Bank's policy settings in the near term.

- The latest round of headline domestic CPI data topped expectations, although

remains shy of the lower end of the RBA's target band of 2.0-3.0%. Underlying

inflation metrics were inline with the RBA's Q4 assumption (from the most recent

SoMP), with the trimmed mean printing at +1.8 Y/Y and weighted median printing

at +1.7% Y/Y, vs the RBA's expected +1.75% Y/Y.

- Markets continue to focus on prospects for further cash rate cuts from the

RBA, even with the Bank constantly stressing that it thinks that the next cash

rate move will be up. Board member Harper was the latest to push the RBA's long

held view, with a clear focus on labour market dynamics apparent at the Bank.

- Sino-U.S. trade, a broader China slowdown, domestic funding matters and the

feedback loop from lower house prices into consumer behaviour pose risks to

their view.