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Strong labour market complicates picture for RBA

Although the RBA toned down its hawkish bias at its meeting on Tuesday, yesterday's frothy jobs report may well spur a reversal on that front. Indeed, the labour market appears to be holding up a lot better than the RBA had expected. However, as long as inflation continues to fall back, aided by a supply-side recovery, there is still a solid case for the Bank to start easing policy as early as August.

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