Scotiabank - RBA Could Increase OCR In Between 0.25% to 0.5%

Scotiabank economists believe the Reserve Bank of Australia (RBA) will raise interest rates by 0.25% to 0.5%, and that trade markets will only see a quarter-point increase in future agreements.

June 06, 2022 - 12:46 PM 259 views

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Scotiabank economists believe the Reserve Bank of Australia (RBA) will raise interest rates by 0.25% to 0.5%, and that trade markets will only see a quarter-point increase in future agreements.

Key Quotes

The Reserve Bank of Australia (RBA) guided the increase of the additional prices that will be required to achieve its overall 2% inflation target, which jumped up to 5.1% in the last quarter (Q1).

Since then, Australia has seen a slow speed up in the labor wage growth rates to 2.4% y/y and 0.7% q/q, non-annualized; a soft employment report of +4K, with a substantial comprehensive growth offset by a part-time loss; and solid first-quarter GDP and retail sector sales in April. "The RBA has already stopped buying Australian bonds with QE (in January), decided to stop reinvesting maturing bonds (in May), and stated explicitly that outright bond sales are only a remote prospect."

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