RBA: The key pinch point likely remains wages growth - HSBC

In its latest note released overnight, the analysts at HSBC offered their afterthoughts on the RBA meeting minutes and its subsequent impact on the AUD.

Key Quotes:

“The RBA minutes ran through the usual laundry list of factors affecting the economy, concluding that policy inaction, for now, is appropriate.

The mix of factors allowed the Sydney Morning Herald to cite the "significant risk" that the RBA sees around weak consumer spending, whereas Bloomberg reported that Australian bonds were lower after the minutes signaled "confidence" that unemployment would fall and inflation would climb.

The AUD was little changed given the myriad of factors supported patience on the policy front.

The key pinch point likely remains wages growth. If this picks up, the RBA can pivot towards the exit on rates (HSBC looks for a hike in Q2 18). If not, then we can expect the current patient stance to be extended.“