Q1 CPI responses

Craig James at Commsec

  • "we don't think there is a screaming need for interest rates to be cut on economic activity grounds"
  • Low inflation "opens the door" for a cut "if they deem it is necessary"
  • "The question is whether the Reserve Bank believes that cutting interest rates will actually provide a boost to the economy given that interest rates are already at generational lows."

(that's via the Australian Financial Review (may be gated))

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Also

JP Morgan:

  • Expect a cut in May then again in August
  • CPI is a game changer for the RBA

Westpac:

  • Low inflation, on its own, is not a trigger for a rate cut
  • A rate cut is dependent on local economic conditions demanding a rate cut
  • With unemployment on a new downtrend this is not so at the moment and we suggest that the RBA is waiting to see a new weaker trend in domestic activity and employment before it would embark on such a strategy

AMP Capital chief economist Shane Oliver:

  • CPI increases the pressure the RBA to cut
  • Persists with his view the RBA to cut on coming months, says it may cut as early as next week

DB:

  • RBA to remain on hold in May
  • Statement to become more dovish