The Australian CPI for Q2 is released today (0130GMT) – this is a very important focus for the market as it will be strongly indicative of whether the RBA will ease or not (according to the market).
Market consensus is that a CPI result at or below expectations will give the RBA increased scope to ease at their next meeting (August 6). OIS pricing has a 65% probability of a 25 basis point cut at the next meeting. I gotta go out on a limb and say I’m not in the “expecting a cut” camp. But if the CPI comes in below expectations I’ll reassess. What I think doesn’t really matter though – what’s important is market consensus and how the AUD responds to today’s release.
We only get official CPI results in Australia 4 times a year, not monthly as in nearly all other developed economies.
- Q2 CPI, expected +0.5% q/q, prior +0.5%
- Q2 CPI, expected +2.5% y/y, prior +2.5%
- Q2 CPI, trimmed mean (the measure the RBA pays most attention to), expected +0.5% q/q, prior +0.3%
- Q2 CPI, trimmed mean, expected +2.1% y/y, prior +2.2% y/y
