The Judo Bank / Market Australia flash PMI data is here:
Australian January preliminary PMI, manufacturing 49.8 (prior 50.2)
Analysis in that report is from Warren Hogan, Chief Economic Advisor at Judo Bank. Hogan is a very well respected economist in Australia and is worth paying attention to.
From the report, his quick preview of what's coming up from the RBA:
- "Inflation pressures may abate somewhat but the risk for
the RBA is that inflation remains stubbornly high well into
2023. This could maintain upward pressure on inflation
expectations and wages growth. On this basis it seems
premature for the RBA to pause the current tightening
cycle. Australian interest rates are low by any standard
except that of the last few years. Real interest rates remain
deeply negative leaving monetary policy well below most
long-term concepts of ‘neutral’. Australian interest rates
are well below those in other advanced economies facing
similar inflation risks. - "We expect the RBA to hike the cash rate by 25bp in each
of February and March before an extended pause. Further
rate hikes may be required later in 2023 if the economy
and inflation prove more resilient than current consensus
forecasts suggest."
-
I don't always agree with the analysis I see but I do with this.
As I have said many times before in my own thoughts of what the RBA will do in February, a hike is the only reasonable thing to do given this, from the front page of the RBA website:
The RBA is forecasting inflation to fall, and I've seen opinion that this is the basis for the Bank pausing now, i.e. no need for a hike in February. I disagree and, if any of the folks at the RBA are reading this, please recall how poor the bank's forecasts usually are. Use the data, don't try to second guess it.