Amusing stuff from the next Governor of the lunatic RBA, Bloxo at HSBC:
For the RBA, the numbers surprised to the downside (relative to the forecasts they published on 8 February). The RBA had GDP growth of 2.8% y-o-y — today’s result was 2.3% y-o-y.
- downside surprises … sharp fall in dwelling investment and the drag from net exports
- Public demand and business investment surprised to the upside relative to the RBA’s forecasts
- household consumption growth was broadly in line
For the moment, we expect the RBA to remain focused on the labour market for determining its policy rate setting.
- If the labour market were to weaken materially the RBA would clearly consider cutting — today’s GDP numbers are unlikely, on their own, to get the RBA to cut.
Our central case is that the RBA’s next move is up, albeit not until mid-2020.