Australian Markets Weekly – 21 March 2016
Labour market suggests RBA on hold but keep an eye on inflation expectations Markets again moving around sharply with a […]
Labour market suggests RBA on hold but keep an eye on inflation expectations
- Markets again moving around sharply with a less aggressive Fed (two rate hikes now expected in 2016 versus four previously) seeing the US$ broadly weaker and $A stronger.
- Australian labour market data show slower trend employment growth in recent months, though some of this likely reflects a payback from previously overstated strength. The unemployment rate however was back down to cycle lows of 5.8% driven by trend improvement in NSW, QLD and Victoria but continued deterioration in WA.
- While the RBA is clearly focused on the labour market and global developments, recent communications – especially in the context of a number of recent global moves – highlight that inflationary expectations also need to be watched – especially if actual inflation undershoots. The RBA slightly changed its description of inflation from “consistent with” to “close to” target at its February interest rate decision.
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