The RBA is set to hold the cash rate for a third consecutive month later today, but with a hawkish twist. The US$ remains strong against the yen and renminbi. The RBI is keeping a floor under the rupee.
In our bonus deep-dive interview, ANZ’s Group Chief Economist Richard Yetsenga look’s at India’s burgeoning economic growth as it steps up to host G20 leaders this weekend.
5 things to know
ANZ’s Head of Australian Economics Adam Boyton expects the RBA to hold the cash rate at 4.1% early this afternoon Australian time, but continues to warn it may have to hike again if inflation stays sticky and high.
Adam also thinks the RBA will hold off any talk about an acceleration of its quantitative tightening.
The US$ remains strong this morning against Asian currencies, as interest rate differentials widen more in the global reserve currency’s favour, ANZ’s Head of FX Research Mahjabeen Zaman says.
Australian profits and inventories were surprisingly weak in Q2. Adam will tweak his final Q2 GDP forecasts with net exports data today ahead of Wednesday’s full Q2 GDP result.
Mahjabeen says the RBI now has a big enough buffer of foreign reserves to support the rupee, dampening imported inflation for factory equipment importers.
Cheers
Bernard
PS: Look out for an updated Australian GDP forecast tomorrow.
