Base Case: Pause (60% prob)

“The case for pausing is strong: 1) The Bank clearly stated a pause would be discussed at the Apr meeting in the Mar Minutes; 2) Discussing a pause for the Apr meeting suggests the appetite to hike in BOTH April and May is low, supporting a pause in April, but leaving open the possibility of hiking in May if CPI exceeds RBA forecasts; 3) Mention of the monthly inflation series was elevated to the top of the Mar Statement and the print for Feb published last week came in below expectations following a soft Jan print – both outcomes provide the RBA with room to pause; 4) The four data points the Governor cited – inflation, employment, retail sales and business activity do not collectively support a hike. AUD/USD 0.6630.”