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Speaker 1: Welcome to Fear and Greed the week Ahead. I'm Sean Aelmer,

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Speaker 1: and as always I'm joined by economist Stephen Cooculis. You'll

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Speaker 1: find him at the Cook dot com, t h e

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Speaker 1: k o uk dot com and on X using the

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Speaker 1: handle the Kirk Stephen. Good morning, Good morning Sean, big week, Stephen.

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Speaker 1: We have inflation figures. These are the ones we've been waiting.

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Speaker 2: For the quarterly inflation numbers. And while some of us

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Speaker 2: sort of warm to the monthly inflation results, we do

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Speaker 2: know that from the abs they're still experimental and they

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Speaker 2: don't cover the full spectrum of prices of goods and services.

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Speaker 2: So the quarterly ones are the ones that matter. So

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Speaker 2: they're the ones that the RBA will be looking at

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Speaker 2: when they consider the next move in ingestrates. And the

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Speaker 2: market is expecting further good news on inflation. That for

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Speaker 2: the headline figure, which again is still being a little

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Speaker 2: bit distorted by the electricity substues. This time the subject

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Speaker 2: is going to put upward pressure on headline inflation because

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Speaker 2: some of them, particularly the state level, are coming to

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Speaker 2: an end. So the market's looking for about aero point

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Speaker 2: seven point eight for the quarter. But the annual rate

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Speaker 2: sort of still tracks at about two point four percent.

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Speaker 2: More importantly, for the RBA, the trimmed mean is expected

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Speaker 2: to come in about point six or point seven, which

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Speaker 2: brings it down to two point eight. So for the

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Speaker 2: first time in wow, three and a half years, the

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Speaker 2: year on year eight's going to be within the target band.

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Speaker 2: And indeed, as some people are doing, you annualize the

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Speaker 2: last two quarters. So previous quarter we had a point five.

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Speaker 2: So even if we get a point seven this time,

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Speaker 2: you annualize those last two quarters, it's still about two

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Speaker 2: and a half. So should lock in the expectations for

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Speaker 2: the rate cup from our friends at the RBA on

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Speaker 2: the twentieth of May.

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Speaker 1: So is this number that significant that if it comes

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Speaker 1: in at point sixty seven underlying we will get a

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Speaker 1: rate cum If it comes in at eight nine or beyond,

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Speaker 1: we probably won't certainly anything less, we definitely will. Is

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Speaker 1: it that big a number?

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Speaker 2: It almost is, Yes, it'd take I'm not quite sure

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Speaker 2: what a take for them not to cut, you know,

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Speaker 2: even a point eight. Yes, it's a little higher than

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Speaker 2: they had, like a point nine. Look that they might

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Speaker 2: actually have pause at that sort of level, But it

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Speaker 2: is that important. The RBA have told us Michelle Bullock's

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Speaker 2: been out at every press conference she's given after the

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Speaker 2: previous rate decisions that she's made and all the boards made,

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Speaker 2: I should say, and saying, look, we need to see

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Speaker 2: confirmation that inflation's falling. They like what's happening to inflation.

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Speaker 2: It has decelerated quite nicely over the last eighteen months

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Speaker 2: or so, but they want to see confirmation, rock solid

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Speaker 2: confirmation that it's near the middle point of the target range.

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Speaker 2: And so that's why it is so sensitive to that,

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Speaker 2: you know, the odd one or two tenths of a percent. Yeah,

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Speaker 2: it does matter for them.

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Speaker 1: Kind of a lot of pressure from Michelle Bullock in

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Speaker 1: this instance because she has given her story now ever

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Speaker 1: since she took the top job, and she's done rate cut.

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Speaker 1: That's good, but there's a new Montree policy board. Everyone

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Speaker 1: expects them to cut if it comes in at an

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Speaker 1: annualized rate over that last six months of you know,

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Speaker 1: two and a half percent or thereabouts. She'd be a

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Speaker 1: brave governor to not cut if that all happened.

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Speaker 2: She would be very brave, indeed. But she's been brave

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Speaker 2: too to sort of resist some of the other pressures

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Speaker 2: that have been on and off for the last well

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Speaker 2: eighteen months or so. You recall in twenty twenty four

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Speaker 2: there was some chatnel she should hike, well know she

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Speaker 2: should cut. So she battered them all out of the

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Speaker 2: car park, and so the stuck to her own guns.

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Speaker 2: And you know, when we think back at the twenty

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Speaker 2: twenty four Montrey policy experience, where by the way, interest

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Speaker 2: rates were not changed at all at any time during

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Speaker 2: twenty twenty four, her approach was to not rule anything in,

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Speaker 2: not rull anything out, to continue to see her message

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Speaker 2: evolve about, yes, we're happy with inflation trajectory, but we

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Speaker 2: want it to be lower. We're worried about a tight

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Speaker 2: labor market, but we're happy that unemployment's low. So it's

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Speaker 2: not a bad thing that we've got low unemployment. In fact,

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Speaker 2: it's a desirable thing. So she manages that pretty well,

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Speaker 2: in fact very well. And the rehtoric and the commentary

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Speaker 2: that she gives. And I love these press conferences. They're

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Speaker 2: so powerful and enlightening. And so that's for the twentieth

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Speaker 2: of May. But this inflation number is a really really

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Speaker 2: important one.

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Speaker 1: Okay, house price dated this week as well.

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Speaker 2: House prices yes, we get the update, a little bit

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Speaker 2: of a pullback in house prices. It's a curious one

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Speaker 2: that we've got this interesting phenomenon where that i'll call

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Speaker 2: them the boom cities, you know, Perth, Adelaide and Brisbane,

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Speaker 2: where they had had really rapid about growth in house prices,

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Speaker 2: their house price growth is continuing to slow. The weak

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Speaker 2: ones Melbourne in particular, but also Sydney to a point,

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Speaker 2: appear to be just ticking up a little bit. Maybe

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Speaker 2: there's an affordability issue in these big cities that have

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Speaker 2: had relatively modest price changed in the last little while.

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Speaker 2: So bottom line and you'll figure aboutzero point two percent,

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Speaker 2: so you know, not that strong, but not disastrously weak either.

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Speaker 2: So yeah, house price is still probably edging up, but

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Speaker 2: they're converging whereas a year ago there was a big

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Speaker 2: divergence between the strong and the weak cities.

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Speaker 1: I'm sure we're going to get taken over by the

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Speaker 1: inflation day and the house price data, but there's other

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Speaker 1: bits and pieces around this week, what eld Stephen.

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Speaker 2: Bits and bobs. International trade that probably probably goes through

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Speaker 2: to the keeper, although with the tariff stuff going on,

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Speaker 2: we might have a little bit more of a look

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Speaker 2: at the export numbers, but a small surplus expected three billion.

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Speaker 2: The other one's retail trade numbers. They're probably a little

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Speaker 2: bit more important March and the March quarter, getting back

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Speaker 2: to that quarterly issue that we love to talk about

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Speaker 2: for retail spending, and the March quarter number actually has

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Speaker 2: in real terms, so inflation adjusted terms, feeds into the

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Speaker 2: GDP estimate that we get. Oh gosh in a month

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Speaker 2: or two time, I've lost track on a calendar here,

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Speaker 2: but you know, so it sort of says how we're spending. Look,

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Speaker 2: according to the internal data from a number of the banks,

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Speaker 2: it looks as if retail sales will be will be okay,

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Speaker 2: a small point three point four month on month increase,

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Speaker 2: a quarterly rise of aboutero point five percent. So again

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Speaker 2: one of these ones that a little bit like the goalielocks,

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Speaker 2: not too hot, not too cold, sort of just rife

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Speaker 2: that they're just sort of in the middle of the groove.

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Speaker 1: Fantastic. Enjoy the week, Steven. It's a big one because

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Speaker 1: it's been a bit quite the last couple but many

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Speaker 1: on this week.

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Speaker 2: At the end of the week, we've got an election,

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Speaker 2: so we love to excite everyone as well.

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Speaker 1: Stephen, thanks for joining us on Fear and Greed this morning.

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Speaker 2: Thanks Sean.

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Speaker 1: That is a kind of a Stephen Good Coolers, better

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Speaker 1: known as the Koki. You can find him at the

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Speaker 1: cook dot com and follow him on X using the

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Speaker 1: handle the Kirk. I'm Sean Alma and this is Fear

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Speaker 1: and Greed weak Ahead