RBA's Bullock: Discussed circumstances in which we might have to tighten

Did not explicitly consider case for a rate hike this meetingDiscussed circumstances in which we might have to tightenDid discuss what they might have to do if rates need to go upNeed to be cautious on monthly CPI series as yetInflation and jobs data will be important for February meeting Would not put timing on any future move, will be meeting by meetingWe will be looking at quarterly inflation numbersIf inflation looks to be persistent, it will raise some questions for policyIt looks like more rate cuts are not neededBoard does not think the downside risks have abated, upside risks are greaterThe February meeting is the next one as the RBA goes on summer holiday. Needless to say the upcoming data will be critical.AUD/USD jumped on her comments.More:RBA will not react to one economic numberOutlook is for an extended pause or rate hikes, would not put a probability on itRate cuts are not on the horizonLooking for clues in underlying inflation on whether pick up was temporaryThe board is uncomfortable with where inflation isIf data shows that inflation is not slowing, that will be considered at the February RBA meetingShe is certainly putting February in play but the market sees this as a scenario where February is where she would hint at a hike for the March meeting. That second meeting is now 45% priced for a hike.
This article was written by Adam Button at investinglive.com.

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