When the boffins at Martin Place get back from their extended holiday next month, the February RBA rate rise could be a hot one!
Yesterday we saw the release of retail sales for November, which rose more than 1.4%, way ahead of the 0.6% that had been expected, with lots of upwards revisions to previous prints, resulting in a near 8% gain. From Westpac:
Then we had the latest CPI print – which I still contend has rental data way underrepresented. Via the ABS:
- The monthly CPI indicator rose 7.3% in the twelve months to November.
- The most significant price rises were Housing (+9.6 per cent), Food and non-alcoholic beverages (+9.4 per cent), Transport (+9.0 per cent), Furniture, household equipment and services (+8.4 per cent) and Recreation and culture (+5.8 per cent).
By itself these figures point to more rate rises from the RBA, and combined with the possibility of the US Federal Reserve easing off its own agenda as its inflation problems might be moderating, should put a rocket under the Aussie dollar:
Instead it keeps coasting along like a tossed banana versus USD, unable to break through the 70 cent level as currency markets price in a more moderate position.