Australia's flash PMIs suggest that business conditions bounced back in April, while firms' hiring intentions strengthened in tandem. However, firms have yet to see any respite from intensifying price pressures, which are increasingly being passed on to consumers. Against this backdrop, there is a growing risk that the RBA will raise rates above the 4.60% peak we have pencilled in. In contrast, Q1 CPI data for New Zealand show that underlying inflation remains benign, supporting our view that the RBNZ will start hiking rates later than markets anticipate.
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