Despite interest rates hitting decade+ highs, the RBA will be forced to keep raising interest rates even beyond this week's meeting
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There are at least two important releases we should care about this week. Thanks to Matt Weller (StoneX), we can broaden our view on German CPI and RBA decision.
Are you of the opinion German CPI on Friday will confirm inflation slowdown?
The delayed release of Germany's inflation data should confirm the slowdown seen across the rest of the continent amidst falling energy prices due to a relatively mild winter. Notably, the "core" (ex-energy and food) reading for the broader Eurozone came in at a record high of 5.2%, and Germany may see similar price pressures even if the headline number moderates as expected.
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Do you expect Reserve Bank of Australia to pause hiking after February decision?
With inflation still rising Down Under, despite interest rates hitting decade+ highs, the RBA will be forced to keep raising interest rates even beyond this week's meeting. While it's not exactly comparable, its notable that the Federal Reserve is still raising interest rates even though inflation in the US peaked back in July. Finally, China's reopening appears to be proceeding as well as could be expected, which should boost the Australian economy and provide an inflationary impulse as the year progresses.
