It’s been a while since the hawkish minded have had a moment. But yesterday’s CPI gave them the brief platform they needed to re-screech their case. From COMMSEC, via Bloomie:
“Australia is far different from some other parts of the globe,” said Savanth Sebastian, an economist at a unit of Commonwealth Bank of Australia. “The euro zone continues to worry about the deflationary threat from sluggish growth and sliding oil prices, while inflation remains below the Fed’s target rate in the U.S. But here in Australia inflation is holding at the low end of the Reserve Bank’s target.”
Australia was different in the morning, according to ANZ, and different in the afternoon, according to CBA. What is really weird about this is that deflation is only half of the story behind central bank cuts worldwide. The other half is improving competitiveness through a falling currency. Just as well Australia doesn’t need to compete, because it’s different.
