Greg posted on the Australian inflation data yesterday:
- The weaker CPI slowed the AUDNZD a bit. AUDJPY cracking lower.
- Lower CPI send the AUDUSD lower. Tests key swing area.
- Australian CPI for 3Q 0.6% vs. 0.8% estimate. Trimmed mean 0.4% vs 0.5% est.i
And, from earlier today I had this:
Via Capital economics, another response to the data (in brief) and what they see as implications for the Reserve Bank of Australia:
- The drop back in the headline inflation rate ... is quite remarkable given the surge in utility prices
- It just underlines the weakness of price pressures in other areas, which supports our view that the RBA won't raise interest rates at all next year
- the RBA will view the rise in utilities prices as a hit to households' spending power rather than a sign that inflation pressures are building
- subdued demand and intense competition is keeping a lid on inflation across the economy. That won't change soon.
- These data support our view that the economy won't be strong enough to raise underlying inflation to the middle of the RBA's 2-3% target. What's more, these data overstate the true rate of inflation a bit. From the fourth quarter, when the ABS updates the spending weights in the CPI basket, inflation will be a bit lower than otherwise.
(bolding is mine)
