RBA Set To Deliver A String Of Hikes, Keep Guidance Hawkish (WSJ)

WSJ RBA watcher Glynn writes “there was enough nastiness in Australia’s recent fourth-quarter inflation report to lock in the prospect of several interest-rate increases over the coming months, with the data confirming that the country continues to lag well behind other major economies in the race to tame prices.”

• “Not even this week’s news that retail sales dropped 3.9% on month during the key period of December seems like it will be enough to dissuade the Reserve Bank of Australia from raising interest rates again at its first policy meeting of the year next Tuesday.”
• “There is too much statistical noise in the retail sales figures amid consumers’ shifting spending patterns, and the RBA will probably focus more on its business liaison data showing that retailers are still enjoying fat profits.”
• “There is also unlikely to be much, if any, softening of the RBA’s guidance next week. A 50-basis-point increase will likely be discussed, though a 25-basis-point rise is a far more likely outcome.”
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