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Expectations Ease And Signal Further Inflation Moderation In Q4

AUSTRALIA DATA

Melbourne Institute consumer inflation expectations eased to 4.5% in December from 4.9%, the lowest since January 2022. The result is not surprising given the almost 8% drop in national petrol prices since mid-November, the larger than expected moderation in the October CPI (which received a lot of press coverage), and the RBA on hold at the start of December. While inflation was the main concern of households in the latest Westpac survey, the RBA will be pleased to see expectations continuing to trend lower. Q4 CPI on January 31 will be key to the February meeting outcome, and the MI data suggests it should moderate further.

Australia quarterly CPI y/y% vs MI consumer inflation expectations

Source: MNI - Market News/Refinitiv

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