Trimmed mean 0.5% q/q (0.4% expected) ... UP GOES THE AUD ON THIS HIGHER NUMBER

(The trimmed mean is the measure the RBA pays most heed to, it is the 'core' inflation figure where the RBA target band is 2 - 3%)

Headline 0.4% q/q:

  • expected 0.4%

  • prior was -0.2%

and 1.0% y/y,

  • expected is 1.1%, prior 1.3%

Trimmed mean

0.5 % q/q:

  • expected 0.4%

  • prior 0.2%

1.7% y/y:

  • expected 1.5%, prior 1.7%

Weighted median :

  • For q/q 0.4%: expected 0.4%, prior was 0.1%

  • For y/y 1.3%: expected 1.3%, prior was 1.3%, revised from 1.4%

OK, the headline q/q is in line with expectations, but the 'core' (trimmed mean) is higher than expected. This will diminish the chances for an RBA August rate cut. It will not remove it completely though. Inflation is still low, and maybe uncomfortably so for the Reserve Bank of Australia.

AUD was marked higher immediately but has come back down a little. AUD had a decent move higher yesterday and overnight, which took out a lot of the shorts that had been established - some of those left over were taken out on the AUD pop after the inflation number.

OK, more:

  • Trimmed mean ('core' inflation) is at its lowest in its series history still (for the y/y)
  • Headline inflation lowest in 17 years