The strong employment gains intensify upside inflation risks. Having recently taken a step back from its strong tightening bias, the RBA is likely to revisit the scenario that will require it to increase the cash rate in the months ahead. |
The unemployment rate is likely to break below 5 percent in the months ahead. It will escalate the pressure on the Reserve Bank to raise interest rates, which in turn will be a shot in the arm for the Australian dollar. |
There is still a huge amount of resilience in the consumer side of the economy, |
There's an opportunity to buy U.S. dollars on the expectation that by the second half of this year U.S. strength will be sustained. |
They've set the groundwork for a rate rise in October. They've been disappointed by how persistently high inflation is and how the economy just hasn't cooled off in a way they would've liked it to. |
Underlying inflation is still sufficiently strong for the RBA to maintain a fairly strong bias to increase interest rates in the months ahead, although the urgency for a rate rise is not yet extreme. |
We are just hoping the export sector kicks into growth during 2006. Improvement in the trade deficit has been a long-time coming. |
We are still waiting for an improvement in trade to fuel the economy. The trade deficit has been large for a long time. |
We forecast the Reserve Bank will raise rates by the middle of the year as it works to damp inflation pressures that are still pronounced. |
We're short-term fans of the Australian dollar. The global demand for commodities is incredibly strong because of the global economy, which is doing very well. |
With the core inflation readings fly-papered to a narrow range around 2.5 per cent, there is scope for the RBA to continue its rates-on-hold strategy for several more months. |
[Any hopes that] the Reserve Bank could hold off raising interest rates have been dashed, ... If the bank is going to contain inflation in 2006 and 2007, they have got to keep raising rates. |