PREVIOUS TRADING DAY EVENTS 05 May 2023

Announcements 

RBA released its Monetary Policy Report warning that inflation is at a risky level, surpassing all expectations. It raised the argument that interest rates might have to rise further to restrain inflation, after a surprise hike to 3.85 last week.

 
Inflation could turn out to be more persistent if productivity growth remains weak, the high inflation environment leads to firms expanding margins as their costs ease, there is greater feedback between higher prices and wages than expected, or if rents increase by more than expected, said the RBA in the 79page report.

The RBA expects core inflation to drop to around 4.0 by the end of this year, from the current 6.6 pace.

The longer inflation remains above target, the greater the risk that inflation expectations rise and price and wagesetting behaviour might adjust accordingly, said the RBA.

Source httpswww.reuters.commarketsaustraliacentralbankfretsoverupsiderisksinflationitwarnsrates20230505

The Federal Statistical Office FSO released the CPI figure for Switzerland. The change remained unchanged in April 2023 compared with the previous month showing a solid 0.0 figure, lower than the previous 0.2 change and lower than expected.

 
Swiss headline inflation has remained above the central banks target range since February 2022. However, it is much lower than those of other countries, many of which have seen doubledigit inflation. The SNB has hiked interest…