Westpac write "inflation continues to.....>

AUSTRALIA: Westpac write "inflation continues to hold under the RBA's target

band and with the two quarter annualised pace running at 1.2% suggests it is

unlikely get back into the band anytime soon. Moderating housing inflation has

been key to containing inflation below the RBA target band. Even with our

expectation for a modest lift in housing inflation through 2020, we still don't

see it being able to sustain inflation within the target band. With downside

risks to dwellings and rents inflation in the CPI, downside risks are apparent

for our forecasts for both headline and core inflation. The fall in unemployment

through 2018, along with the depreciation of the AUD, should be pushing the pace

of inflation through 2019. However, retail margins remain under pressure as

household consumption slows and inflation expectations remain well anchored. As

such, housing costs present the key risk to the inflation outlook. Our

preliminary estimate for the March quarter 2019 CPI is 0.1%qtr /1.4%yr for

headline and 0.4%qtr/1.6%yr for the average of the core measures."