Q1 Australian inflation data is here
- Goldman Sachs response is here
More now, these collated quickly by Reuters:
RBC CAPITAL MARKETS
- "Nothing screams. Core inflation is still tracking below 2 percent, headline inflation popped up on some noisy bits including fuel and food distortion from the cyclone. It doesn't really change anything for the RBA when they do their forecast next week. They probably will have headline inflation a touch higher, but core inflation trends are consistent with what we've seen for the past year. It does not add to any pressure they are going to cut. It does not really suggest they should go up any time either. We still have a cut in Q4."
JP MORGAN
- "The headline number 0.5 percent - that's a little bit under what we expected. The core measure is annualising at 2 percent at best, a little below that in fact. The issue is we still have very, very weak core inflation. RBA has cut 50 basis points in the last year and looks like core inflation is still an issue. I think it further reiterates that RBA has more work to do in the current cycle and rates need to go lower if you want to engineer a sustained upturn in core inflation."
CBA
- "Not a lot in this is going to rock the boat one way or the other. Inflation overall looks well contained, so the RBA will be happy with that. Equally, they'll be happy that headline inflation is back within the target band for the first time since 2014."
Any boldings above are mine.
