We still expect the RBA to end QE in February

Surging cases of the Omicron variant are putting Australia’s healthcare system under pressure and will weigh on consumption in Q1. But we think fresh lockdowns will be avoided. What’s more, growing staff shortages due to employees self-isolation may increase inflation and reduce unemployment in the near term. On that basis, we still expect the RBA to announce the end of its bond purchase programme at its next meeting in February.