A MIXED MESSAGE FROM INFLATION - The Consumer Price Index (CPI) - rose by 0.1 per cent in the March quarter and by 2.5 per cent over the past year. Inflation is now back in the Reserve Bank's 2-3 per cent target band. The underlying or core rate however, surprised by not being so accommodating. This rose 1.1% in the quarter which was above expectations of .75% up. This reduces slightly expectations for an easing next month but the likelihood of reductions in the underlying rate over 2009 will keep further easings on the agenda.

The IMF continued with the gloomy statistics coming out of international bodies. They've predicted the Australian economy will shrink by 1.4% this year - close to the -1.7% of 1990 - 91. They expect the global economy to slump by 1.3% (almost 2% lower than their January forecast of +0.5%) this year before turning positive next year at 1.9%