Australian official inflation data for Q3

'Headline'

  • +0.5% q/q, expected 0.7% and prior was 0.7%
  • +1.5% y/y, expected 1.7% and prior was 1.5%

'Trimmed mean'

  • +0.3% q/q, expected 0.5% and prior was 0.6%
  • +2.1% y/y, expected 2.4% and prior was 2.2%

'Weighted median'

  • +0.3% q/q, expected 0.5% and prior was 0.5%
  • +2.2% y/y, expected 2.5% and prior was 2.4%

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The CPI is weaker than expected right across the board, on all three measures

AUD/USD marked lower immediately

It is NOT news than inflation is not an issue in Australia at present. The lower numbers do, though, remove all doubt that there is no inflation hurdle to a rate cut, should the RBA wish to go down that path.

The 'trimmed mean' is the main inflation focus for the Reserve Bank of Australia. At 2.1% y/y it is running at the bottom of the RBA target band (2 to 3%)

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Given the falling AUD should be making imports more expensive this low, low CPI reading is a bit more of a surprise. Still, inflation is showing low pretty much everywhere.

Hearing some reactions ... bolstering the confidence of those looking for a cut on November 3, not surpisingly. Market pricing for a cut then has jumped also, from sub 30% to around 55% now.