Q1 CPI data is here
(OK, then, to save you a click...
For the 'headline' result q/q: -0.2% - expected +0.2%, prior was +0.4%
For the y/y, 1.3% - expected 1.7%, prior 1.7%
-
For the'trimmed mean'
0.2% q/q, expected 0.5% and prior 0.6% q/q
1.7% y/y. expected 2.0%, prior 2.1%
-
Weighted median':
0.1% q/q: expected 0.5%, prior was 0.4%, revised from 0.5%
- 1.4% y/y: expected 1.9%, prior was 1.9%
YW )
Inflation is reading lower, partly due to the AUD strength, this is lowering the cost of imports. AUD traded higher in Q1.
- Tradeable inflation fell 1.4% on the quarter
- Non-tradable inflation held at +0.4%. Some of the non-tradable inflation is quite sharp, the education sector, for example, is up 4.6% on the quarter ... yikes.
Also ... oil and commodity prices more generally have come back from their lows ... oil is up 60 or so percent ... Yikes again. This will impact going forward.
The low inflation we are seeing provides 'scope' for the RBA to ease further.
Yes, yes it does.
But 'scope' is not enough to tip this dour bunch at the RBA into cutting in May. Low inflation will, though, allow them to keep accommodation at the current rate chugging along. Domestic demand is not slipping, and its this we'll have to keep an eye on - if domestic demand falls the RBA may act. While unemployment is trending lower then reductions in domestic demand seem unlikely.
So, to summarise.
Will the RBA cut next Tuesday?
- No
- Fuggedaboudit
- Gettouttahere
-
Now, if you'll excuse me I'm off to cook some eggs. That way they'll be nice and cool if I have to apply them to my face next Tuesday if the RBA surprises me.
