In brief from the note issued today:
- The tragic developments in the Ukraine are unlikely to impact the likely policy timetable. Because Russian energy exports have been omitted from the sanctions we have not markedly increased our inflation forecasts. The Wage Price Index printed as expected this week; broadening wage pressures coupled with substantial increases in underlying inflation will maintain the expected schedule for the RBA for an August tightening.
More on that wage data:
- there was evidence of some intensifying wage pressures, albeit insufficient at this stage to justify the RBA raising rates before our schedule of the August meeting.
BTW – The RBA meet next week, Tuesday 1 March.