Trial now

Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

--Expectations on Pay Growth at 1.7% for Second Consecutive Quarterly Survey
     SYDNEY (MNI) - From the Melbourne Institute Consumer Inflationary
Expectations survey for September published Thursday.
                                    September     August
                                    %, Annual  %, Annual
Expected Inflation (trimmed mean)        +3.8       +4.2
Expected Inflation (weighted mean)       +2.2       +2.5
     FACTORS: Annual inflation expectations fell in September with the trimmed
mean dropping to its lowest in three months. Expectations on a weighted-mean
basis fell to their lowest this year and are now close to the bottom of the
Reserve Bank of Australia's 2%-to-3% target band.
     Total pay growth in the 12 months to September rose to 1.4% from 1.3% in
June. Pay expectations for the coming 12 months were unchanged at 1.7% for the
second consecutive quarterly survey -- but this was below 2.1% reported in the
September 2016 survey.
     TAKEAWAY: It is unclear what has driven the second consecutive drop in
inflation expectations. It may likely be the continued effect of 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 fall may also
be a reflection of household worries about economic conditions as seen in
consumer confidence surveys.
     The data on pay growth is concerning given consumers don't appear to be
positive about earnings despite strong growth in employment this year.
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: