Eco Analysis - China's stubborn housing inflation risks further policy tightening (W. Yao)

Eco Analysis - China's stubborn housing inflation risks further policy tightening (W. Yao)

China January housing inflation accelerated to the fastest pace since early 2011. This report justifies Beijing's renewed hawkishness on the housing market. Further acceleration of housing inflation will most likely trigger more policy tightening. Meanwhile, RBA Governor Stevens sounded rather upbeat on the economy in testimony to Parliament, and rather disinclined to cut rates in the short term. Key points were that there is a good deal of stimulus in the pipeline from previous easing, and that the high A$ has been a key factor in the current low rate setting. In response, the A$ strengthened nearly 1c and short-term rates rose.