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Australian inflation data due today. Core is expected way, way above the RBA target band

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Australian CPI data is due today:

The ‘trimmed mean’ is a core measure and its expected to have continued higher in Q3 at 1.5% q/q. For the y/y its expected at 5.6%, way above the upper bound of the RBA target band of 2 to 3%.

Preview comment via Westpac:

  • The Trimmed Mean is forecast to lift 1.5% in September, matching
    the March and June quarters, taking the annual pace to 5.6%yr from
    4.9%yr, well up from the March 2021 low of 1.1%yr. Our forecast peak
    is 5.8%yr in December 2022.

On the headline rate, WPAC expect the rise will be softened by government energy rebates:

  • The reason for the step down from 1.8%qtr print in Q2 are the
    significant state energy rebates, particularly in WA and Victoria. Due
    to these rebates, utility cost are forecast to fall 10.5% subtracting
    0.48ppt from the September quarter CPI.