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Australia inflation cools, trimming mean CPI stays below forecasts
Second-quarter headline CPI fell 0.1% qoq, while the RBA’s preferred trimmed mean rose 0.8% qoq, underscoring slower underlying price pressure.
Australia’s latest inflation report showed easing price pressures, with both headline and underlying measures coming in softer than expected and reinforcing the Reserve Bank of Australia’s rationale to hold rates at its August meeting, Action Forex reports.
The quarterly data, which the RBA places the most weight on, found headline CPI unexpectedly declined 0.1% qoq in the second quarter versus expectations for a 0.7% increase. Annual headline inflation slowed from 4.1% to 3.8%.
Underlying inflation also remained subdued relative to forecasts. Quarterly trimmed mean inflation rose 0.8% qoq, below the 0.9% consensus, and on an annual basis edged up to 3.6%, still below both the 3.7% market consensus and the RBA’s 3.8% forecast published in May.
Monthly figures pointed in the same direction, with headline CPI cooling from 4.0% yoy in May to 3.8% yoy in June, while monthly trimmed mean inflation held at 3.6% yoy versus an expected rise to 3.7%. Action Forex said the results keep the RBA’s tightening bias in place but reduce the urgency to resume tightening immediately after three rate hikes already delivered this year.