Pay hikes in collective bargaining agreements soar

Notwithstanding the RBA's decision to leave rates on hold on Tuesday, we still expect the Bank to deliver three more 25bp rate hikes before bringing its tightening cycle to an end. Indeed, the case for further tightening has only been bolstered by data showing that wage increases under newly-approved enterprise bargaining agreements surged to a 12-year high in Q1. Meanwhile, in New Zealand, detailed national accounts data show that households' net wealth and savings rate both plunged in Q1, underpinning our gloomy outlook for private consumption in the coming quarters.