Official inflation data from Australia from the Australian Bureau of Statistics; Q4 2015 CPI
The 'headline' result higher than expected at 0.4% q/q
- expected is +0.3%,
- prior was +0.5%
For the y/y, 1.7%
- expected is 1.6%, prior 1.5%
-
For the 'trimmed mean' (which is the measure the RBA pays most heed to): it is the 'core' inflation figure where the RBA target band is 2 - 3%.
For the q/q: 0.6%
expected 0.5%,
prior 0.3%
For the y/y: 2.1%
expected is 2.1%, prior 2.1%
-
Finally, the 'weighted median' CPI:
For q/q: 0.5% (expected is 0.6%, prior was 0.4, revised from 0.3%)
- For y/y: 1.9% (expected is 2.1%, prior was 2.1, revised from 2.2%)
-
After the low, low New Zealand CPI print last week if there was going to a departure from the 'expected' for Oz CPI it was thought to be to the downside. Didn't happen. Inflation a tick or so higher than was expected
AUD/USD has popped 30-odd points on the release
There are more stops above 0.7050 looking vulnerable
-
The slightly higher than expected print should make an RBA rate cut less likely. Its unlikely anyway though, they're on hold for a good while yet.
And, if they did want to cut it could be easily justified by pointing out inflation is well into the lower part of the band .... actually the headline is beneath the lower bound, 1.7% y/y vs. 2 - 3% target.
AND ... 'core' (I'm taking the 'trimmed mean') is at 2.1%, i.e. at the bottom of the target band. You know what I just said about this result making an RBA cut less likely? Fuggedaboudit. The RBA is not gonna cut, but if they did want to this result ain't gonna hold than back one tiny little bit.
