US consumer price inflation data released overnight was benign, and equity markets soared. The US Fed is likely to keep tightening monetary policy, but fears of an accelerated tightening have been allayed. Consumer confidence in Australia rebounded in April due, it seems, to the budget’s tax cuts and interest rates remaining on hold.
The latest wage data again showed an “upward tick.” With the revovery of consumer confidence and the upward revision of retail sales reported yesterday, the economy seems to be recovering from its alleged “soft spot,” putting the Reserve Bank ahead on points in its now public debate with Treasury.
Henry had lunch yesterday with John Howard and 700 of his closest friends in Brisbane. The prime minister was in sparkling form, rewarded by spontaneous bursts of applause when he mentioned the tax cuts, the Budget and (especially) the abolition of the superannuation surcharge. This is a man at the top of his form, and several speakers effectively urged him not to give up his current job.
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