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RBC note that "in the Q&A after his recent speech to the National Press Club, Governor Lowe suggested wages growth would need to be closer to 4% to reach the inflation target, a shift from references in the past to ~3%. He also emphasised the importance of sustained within target inflation. When pressed on this in his Semi-Annual Testimony on Monetary Policy, he noted that 2.2% for a couple of quarters would not be sufficient and there would need to be reasonable confidence it would stay there. The elusive nature of achieving the inflation target within his first term which ends in September 2023 coupled with a still accommodative global central banking backdrop suggests that QE3 is likely especially if the RBA wants to keep downward pressure on the currency. We look for a QE3 program of A$75-100bn to be announced around mid-year with the door open to QE4 albeit likely more modest in size."