VIEW: RBC: RBA Will Lag Counterparts But Unlikely For As Long As It Thinks

RBC note that “coupled with the distinctly hawkish shift from the ECB and BoE last night following the Fed and BoC last week, the RBA looks increasingly like an outlier as the global central banking stance shifts away from ultra-accommodative settings designed for very different circumstances. We have sympathy for some patience from the RBA as it awaits further signs of labour market strength but their implicit base case of 2023 looks a little complacent. The firming inflation pulse in AU, increasingly tight labour market, and level of cash are markedly different to the 2017-2018 period when the RBA stayed sidelined while the Fed delivered multiple hikes. The RBA will lag the Fed and a number of its global counterparts but unlikely for as long as it currently thinks.”