RBA Next to Hike, UK Might Avoid a Recession (For Now)
XM Group | Feb 03, 2023 09:08AM ET
CPI jump dents hopes of dovish hike by RBA
Inflation in Australia accelerated towards the end of 2022, hitting 8.3% y/y in December. This was above what the markets were predicting but more or less in line with the RBA’s forecast of around 8%. In contrast, employment unexpectedly fell in December, and the recent PMI readings have been weak too and so the risk of the RBA sounding notably more hawkish on Tuesday is probably not that high.
However, the dollar will more likely be taking its cues from Fed Chair Jerome Powell who is scheduled to speak at the Economic Club of Washington on Tuesday. Powell avoided pushing back against market bets of a shallower rate path in his post-FOMC press briefing so any remarks on the inflation and interest rate outlooks will be critical for the greenback.
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