ANZ: Australia's Inflation Not Expected To Follow The U.S.

ANZ note that "inflation has continued to accelerate in most other developed countries, with U.S. inflation printing at a 30-year high. By contrast, Australia's annual headline inflation slowed in Q3. We don't think the U.S. inflation path is indicative of what is likely to play out in Australia in terms of where inflation will peak. Instead, we anticipate headline inflation here is likely to remain around current levels, whilst underlying inflation accelerates but stays within the RBA's target band. We think a combination of more intense supply side frictions and a quicker acceleration in wages in the U.S. combined together to amplify inflation pressures in a way that is unlikely to happen in Australia. We anticipate Australian wages growth will only start to meaningfully push above pre-pandemic levels by the second half of next year. By then we expect there would have already been a material redistribution of spending from goods to services, domestically but also globally, which should help alleviate supply chain frictions."