The Australian Bureau of Statistics (ABS) has released the all-important Q2 CPI inflation print, with headline CPI rising by 1.0% over the quarter and 3.8% annually.
The result was bang in line with economists’ expectations.
Trimmed mean inflation was softer, however, rising by 0.8% over the quarter to be 3.9% higher year-on-year. This was below economists’ expectations of a 1.0% increase.
The result could be considered in the “grey zone”, making a rate hike a line-ball decision.
That said, the softer trimmed mean print of 0.8% QoQ should stay the RBA’s hand and keep rates on hold.
The RBA will likely also look through the accelerating headline rate of inflation, as they know energy and rent subsidies will arrive and drag inflation lower in the coming quarters.
Markets responded by lowering the probability of a rate hike.
