### POV: STRONG AU GDP PRINT WILL DO LITTLE.....>

RBA: ### POV: STRONG AU GDP PRINT WILL DO LITTLE TO STIR RBA

The stronger than exp. Q1 GDP release will do little to stir the RBA, as

reflected by price action in the Aussie short-end in lieu of the release. The

lack of pressure from markets over pricing a hike will suit an RBA that has

stressed that the next move in its cash rate is likely to be up, although not in

the near term. While the 1.0% Q/Q & 3.1% Y/Y readings were impressive, the

household consumption metric missed & the wage measure remained muted. It is

worth noting that the release is based on a quarter that ended 2 months ago &

that April's retail sales have provided a healthy start to Q2. On Tuesday the

RBA removed its ref. to the reduction of spare capacity in its latest statement

alongside its MonPol decision & noted that "while there may be some further

tightening of lending standards, the avg mortgage interest rate on outstanding

loans is continuing to decline." This perhaps suggests that the RBA believes

that there is no imminent need to act to alleviate borrowers from any pressure

that they may be feeling. The GDP print puts the econ. well on the way to the

RBA's '18 growth forecast (3.25%), but doesn't point to overheating.