HSBC with a note on the Australian data Q4 GDP out yesterday) and implications for the Reserve Bank of Australia.
(In brief, bolding mine)
For the RBA, the numbers surprised to the downside (relative to the forecasts they published on 8 February). The RBA had GDP growth of 2.8% y-o-y -- today's result was 2.3% y-o-y.
- downside surprises … sharp fall in dwelling investment and the drag from net exports
- Public demand and business investment surprised to the upside relative to the RBA's forecasts
- household consumption growth was broadly in line
For the moment, we expect the RBA to remain focused on the labour market for determining its policy rate setting.
- If the labour market were to weaken materially the RBA would clearly consider cutting -- today's GDP numbers are unlikely, on their own, to get the RBA to cut.
Our central case is that the RBA's next move is up, albeit not until mid-2020.
