Australia Melbourne Institute Aug Inflation Expectations Fall

     SYDNEY (MNI) - From the Melbourne Institute Consumer Inflationary

Expectations survey for August published Thursday.

                                       August       July

--------------------------------------------------------

                                    %, Annual  %, Annual

Expected Inflation (trimmed mean)        +4.2       +4.4

Expected Inflation (weighted mean)       +2.5       +2.5

     FACTORS: Annual inflation expectations on a trimmed-mean basis fell in

August following a rise in July to a level last seen in May 2014. Expectations

on a weighted-mean basis, however, remained unchanged at the midpoint of the

Reserve Bank of Australia's 2%-to-3% target band.

     TAKEAWAY: The fall in inflation expectations likely reflects a slowing in

second-quarter headline consumer price index inflation as seen in data published

by the Australian Bureau of Statistics in late July. The data showed headline

CPI rose 1.9% y/y -- falling below the lower end of the RBA's target band.

However, the effect on expectations may be less than expected given the

increases in utilities prices recently that is expected to result in increases

in household energy bills. In its recent Statement on Monetary Policy the RBA

said the outlook for headline inflation was slightly higher than at the time of

its May statement -- reflecting an upward revision to expected utilities prices.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE,MALDS$,M$A$$$,M$L$$$,MT$$$$]