VIEW: ANZ note that "although the.........>

AUSTRALIA: VIEW: ANZ note that "although the latest quarter for inflation showed

a return to the RBA's target band for annual headline inflation, the return will

be brief. We expect the current 2.2% y/y headline inflation to represent peak

inflation for an extended period of time, with underlying inflation likely to

miss the RBA's 2-3% target for a number of years. We think annual trimmed mean

inflation will slow to 1% by March 2021 and pick up to 1.4% only by the end of

2021 as labour market spare capacity prohibits material rises in inflation as

the economy recovers. For headline inflation, although we see it also ending up

at 1.4% y/y by the end of 2021, the pathway headline inflation takes over the

coming 18 months is anything but stable. For instance, annual headline inflation

is likely to be negative in the current quarter. It is possible we might see

some of the most volatile movements in the history of the CPI series over the

next 12 months."