October 29, 2024 00:28 GMT
AUSTRALIA: Q3 Underlying Inflation Should Progress Towards Top Of Band
AUSTRALIA
Australian Q3/September CPI data are released on Wednesday and Q3 will be an important input into the November 5 RBA decision. Headline will be impacted by temporary government energy relief and so the trimmed mean will be the focus, as well as the continued attention on domestically-driven services. Consensus Q3 projections are in line with the RBA’s August Q4 forecasts, which may result in a downward revision to its inflation outlook in the November Statement on Monetary Policy next week.
- Bloomberg consensus is forecasting trimmed mean CPI to rise 0.7% q/q with the annual rate easing to 3.5% from 3.9%, equal to the RBA’s Q4 projection. Most analysts are around consensus. Westpac is exactly in line, CBA is forecasting 0.7%q/q but 3.4% y/y, while both ANZ and NAB have 0.8% and 3.5%.
- Headline is expected to rise 0.3% q/q and 2.9% y/y, below the RBA’s 3.0% for Q4, after 1.0% and 3.8% in Q2. All four local banks are in line with consensus.
- The ABS said that government energy rebates drove a 14.6% drop in August electricity prices. The 6.7% decline in nationwide petrol prices in Q3 will also add downward pressure on headline.
- Monthly September data is also published on Wednesday and headline CPI is projected to moderate to 2.3% y/y from 2.7% in August. There is more variability amongst analysts than the quarterly data with forecasts between 1.8% and 2.6% but forecasts are concentrated around 2.2-2.5%. CBA and Westpac are below consensus at 2.2%, ANZ is in line while NAB is higher at 2.4%.
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