With underlying inflation having returned to its 2-3% target range in Q1, the RBA is all but certain to cut rates by 25bp at its meeting later this month. However, given that timely data point to lingering price pressures beneath the surface, we're sticking to our view that the Bank won't cut rates below neutral this cycle. In other news, opinion polls suggest that the ruling Labor party has continued to garner popular support and may well win an outright majority in this Saturday's federal election. A strong showing at the ballot box could prompt the government to double down on its expansionary fiscal policies.
Note: We’ll be discussing which economies could gain if the US turns away from China in a Drop-in on Wednesday 7th May at 0900 BST/1600 SGT. Register here for the 20-min online briefing.
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