There are some very early indications of a rethink on the outlook for inflation. For the first time in quite a while there is some discussion of upside risks. These risks stem from the large drop in the Aussie dollar since early May. Recent RBA commentary, for example, gives some subtle hints of a rethink. The RBA’s description of the inflation outlook has shifted since the May Board meeting from one that “would afford scope to ease further” to one that, in the July Statement, “may provide some scope for further easing” (my emphasis).
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Commonwealth Bank