WEEKEND ECONOMIST: Easy does it

While labour market data indicates the recovery is in full swing, serious doubts about growth in the US, Japan and Europe are likely to mean the RBA remains cautious over the next six months.

The Governor's Statement following the 25 basis point-move in November reintroduced the term 'gradual' (after excluding it from the Governor's October 15 speech and the October Board Minutes). We think the Bank is now firmly committed to the 'gradual' (read 25 basis points) approach until the global economic recovery becomes firmly entrenched.

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