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What To Expect From RBA? - Views From 8 Major Banks
Barclays: Narrowly Expects A Cut. We narrowly expect the RBA to cut its cash rate by 25bp at its May meeting this week, after the weaker-than-expected Q1 inflation report. The simple average of three underlying price measures (weighted median, trimmed mean, and ex-volatile items) increased 0.8% q/q saar in 1Q16, the lowest reading since the series started in mid-2002, while the y/y comparison was also low at 1.5% y/y. We think the extremely low underlying inflation print increases the risk that the RBA will ease significantly at the April meeting, as the bank will likely want to pre-emptively stem further weakening ... (full story)