Adam Carr summarizes the overnight data. Remember, Canada has a much larger output gap than Australia (ie, much more spare labour capacity) and unlike Australia, its biggest export market by a country mile is the US (around 75 percent from memory). In contrast, Australia exports to booming Asian economies like China, India and South Korea. One shred of inflationary evidence and the RBA will be on the war-path much more quickly than any economists currently expect. We should all be crossing our fingers for a low core CPI print next week. Anything equal to or greater than 0.8 percent and the RBA is going in May, I reckon:
"Other than that, just note that Canadian inflation surged in March – headline was up 1.1% compared to forecasts for 0.6% which brings the annual rate to 3.3% from 2.2%. Core inflation was also well above forecasts, rising by 0.7%, compared to estimates of 0.2%. Annually core inflation spiked to 1.7%y/y from 0.9%. Calls are up for the BoC to hike rates. Inflation doves in Australia should take note of what’s going on globally."
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