Archive

EA Disinflates March’s Excess

• Euro area inflation slightly undershot consensus expectations in March, consistent with the correlation of surprises and energy prices. Yet it was 7bps above our forecast.
• Services prices drove core inflation down to 2.4%, creating some dovish space. However, the headline outcome reversed last month’s upside to match February forecasts.
• Resilience in the real economy still justifies more cautious easing close to neutral, so we expect graduated cuts to skip April for June, but the risk of an extra cut has risen.

By Philip Rush

Australia: Policy Rate Held At 4.1% (Consensus 4.1%) in Apr-25

• The RBA held the cash rate at 4.10%, in line with expectations, citing ongoing but uncertain progress in reducing underlying inflation towards the 2–3% target range.
• Labour market conditions remain tight despite a February employment decline, with low underutilisation and elevated unit labour costs continuing to present inflationary risks.
• Global uncertainties, including new US tariffs and geopolitical tensions, could dampen global activity and further complicate the inflation outlook, reinforcing the RBA’s cautious and data-dependent stance.