RBA: SoMP forecasts were all unchanged - TDS

RBA’s SoMP forecasts were all unchanged as foreshadowed in Tuesday’s statement, except for the unemployment rate projection was lowered from 5.5% to 5.25% throughout the forecasts. Core CPI unchanged at 1.75% for this year and 2% for next year (even headline CPI unchanged at 2.25% despite higher oil prices), notes the research team at TDS.

Key Quotes

“GDP 3.25% by year end this year and peaking at 3.5% for mid-2019. To recap on the RBA Lowe speech last night, the Governor confirmed that the next move is up for the cash rate, but only very gradually at that. We have all-but pushed out our May hike but we just need to see the wages figure to make the shift (21 Feb). Lost in the RBA noise, Dec home loans softer at -2.3%, where investors retreated -2.6% while owner-occupiers at -1% matched consensus (-1%). Looking at the composition, it appears investors buying of established houses took the hit.”