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RBA likely stays wait-and-see after July CPI misses expectations

July CPI cooled to 3.5%, while trimmed-mean inflation stayed at 3.6%, and Commerzbank expects the RBA to lean hawkish at its September 29 meeting without signaling another hike is likely.

Reported · Written up by our desk · Central Banks

FXStreet, citing Commerzbank analysis, said the Reserve Bank of Australia appears to be in a wait-and-see mode after three rate hikes earlier in the year, with policymakers focusing on how inflation and the labor market evolve.

July data showed Australia’s CPI eased to 3.5% year over year, but missed expectations, while trimmed-mean inflation remained at 3.6%. Commerzbank linked the upside miss largely to energy components coming in higher than expected.

With the next RBA decision set for September 29, Commerzbank expects the bank to take a hawkish tone to signal readiness, but still doubts that another rate hike is likely. The analysis also noted that falling real estate prices could weigh on housing-related inflation, though current figures do not show clear signs yet.

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