A string of soft April activity and inflation figures, alongside survey data showing firms dialling back their capex plans, will give the RBA room to leave rates on hold in June. However, we suspect that household consumption and business investment will prove more resilient than recent data suggest. More importantly, from the RBA's standpoint, a look under the hood suggests that the pickup in underlying inflation has much further to run. Accordingly, we're sticking to our view that the Bank will deliver a final 25bp hike in Q3.
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