Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities, notes that Australia’s September quarter core CPI rose by +0.3%/q and 1.75%/y and while this fell short of TD/median looking for 1.9%/y, it was entirely consistent with the RBA’s August prediction that underlying inflation would temporarily dip to 1 ¾%/y this quarter due to lower administrative charges.
Key Quotes
“”The recovery in core inflation from the end-2016 low of 1.44%/yr is now painfully ‘gradual’, and provides ample justification for the RBA to pause for longer.”
“We nevertheless look for higher rates as bloated household debt won’t correct itself. We await Q3 wages on the 14th to reassess our base case of +50bp over 2019.”
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