Goldman Sachs on the Australian CPI data
the trimmed mean is the most closely watched
- The weighted median is the other 'core' rate measure. Both have come in unchanged from Q3.
Overall in-line with expectations with underlying stagnating just below the target band.
- Increase in headline was driven by alcohol, tobaco but in-line with our expectations
- Other main contributors were recreation and culture owing to higher prices for domestic holiday travel
- Oil prices weighed on headline
- Rents were soft/dragging vs. our expectations
FX:
AUD marked higher on the release
Sitting just above the 50/100dma
We didn't see any flows on the move higher
trading still bias to play AUD from the short side, however with Fed tonight. prefer to wait until risk events have passed
CBA:
- another in the long line of benign inflation outcomes
- today's numbers are nothing new
- numbers do not provide any justification for changing the RBA's medium term CPI projections
- If the RBA leaves GDP estimates beyond mid 2019 at 3% growth per annum, they can keep forecasts showing unemployment falling and wages rising
- and thus credibly retain the line that the next rates move is probably up
