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Following the release of dismal Australian CPI readings for the first quarter, the Citibank analysts now see a rate cut by the Reserve Bank of Australia (RBA) next month.

Key Quotes:

“Expect a Reserve Bank of Australia rate cut in May, the second cut could well follow the next month, in June.

The bank had previously been calling for the rate on hold.  

The inflation result “¦ ‘should now be little resistance’ to further monetary policy stimulus, despite improving China, resilient labor market, household debt at high levels.”