The news should provide support for the Australian dollar with a hint that the trade balance will continue to narrow. |
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. |