Australia’s Q1 GDP data will be released on Wednesday and are likely to show that the economy contracted in early 2011. However, the weakness was mainly down to local floods and Cyclone Yasi. Growth will inevitably resume in coming quarters. The key point is that the mining boom is set to intensify and bring above-trend growth in 2012. We expect monetary tightening to resume in Q3 and see the cash rate rising more aggressively than markets anticipate.