Third quarter 2016 inflation data fro Australia out now from the Australian Bureau of Statistics
Headline CPI 0.7% q/q WELL ABOVE EXPECTED (note the comments from the ABS, below)
- expected +0.5%,
- prior was +0.4%
1.3% y/y
- expected 1.1%, prior 1.0%
Trimmed mean (This is the measure the RBA pays most regard to, the 'core' figure where the RBA target band is 2 to 3%)
0.4 % q/q:
- expected 0.4%,
- prior 0.5% q/q
For the y/y, 1.7% Unchanged on the quarter, still under the lower bound of the target band
- expected 1.7%, prior 1.7
'Weighted median:
- 0.3% q/q: expected 0.4%, prior was 0.5%, revised from 0.4%
- 1.3% y/y: expected 1.4%, prior was 1.5%, revised from 1.3%
Headline is well up on expectations, but note the 'core' (trimmed mean and also weighted median) measures are not so strong at all, still weak. The Australian Bureau of Statistics making note that floods during the quarter pushed up fruit and vegetable prices ... This will go some way towards the difference between the headline and the 'core' measures.
AUD has popped higher on the higher headline inflation. Core measures are still on the weak side.
Market pricing for further RBA rate cuts is falling in the wake of the data.
- Pricing for a November cut (meeting is next Tuesday) has pretty much halved, from 15% to around 7% after this data
Headline strong, core still weak. Market not seeming to care too much about the detail.