ANZ forecasts a 25bp cash rate hike from the Reserve Bank of Australia in June

ANZ citing the wages data released earlier today:

• Australian wages index for Q1 2022: 0.7% q/q (vs. expected 0.8%)

ANZ comment:

• Australia's WPI came in below expectations in Q1 at a low 0.7% q/q (0.65%), the same rate as in Q4 2021.
• This suggests the RBA is likely to hike the cash rate 25bp in June, rather than 40 or 50bp.
• Inflation has pushed down real wages.

ANZ's point is that wages are not going drive inflation higher given these numbers. As such there is no need for aggressive rate hikes from the RBA.

Prior to the figures today Westpac were arguing for a 40bp hike in June:

• Here's why the Reserve Bank of Australia will hike the cash rate by 40bps to 0.75%

ANZ graph: