ANZ analysts note that Australia’s both headline and trimmed mean inflation for Q3 printed in line with the expectations of both the market and the RBA.
Key Quotes
“The number gives it some flexibility around the timing of the next rate cut; and a move next week is materially less than a 50% probability in our view. However, we still think the RBA will eventually need to ease further if it is to drive spare capacity out of the labour market and get the unemployment rate down towards 4.5%.”
“Although headline inflation slowed slightly in Q3 compared to the previous quarter, it remained solid. In annual terms, it increased to 1.7%, up from 1.6% in Q2. The largest rise for the quarter from came international travel and accommodation prices, which rose 6.1%, while tobacco prices increased 3.4%. Partly damping these increases were fruit and vegetables prices falling 2.9% and fuel prices coming off 2.0%.”
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