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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUSTRALIA DATA
Australian Q1 CPI inflation was close to expectations with headline slightly above but trimmed mean below. CPI rose 1.4% q/q to be up 7% y/y after 1.9% and 7.8% in Q4, thus confirming that inflation peaked in Q4 2022. Trimmed mean eased to 6.6% y/y from 6.9% while rising 1.2% q/q down from Q4’s 1.6%. However, both the quarterly and annual rates remain elevated, which is likely to continue concerning the RBA. The strong rises in domestically-driven inflation alongside recent data showing no easing in the labour market make a 25bp rate hike on May 2 a distinct possibility.
Australia CPI y/y%
Source: MNI - Market News/Refinitiv
- The ABS noted that headline and trimmed mean CPI rose at their slowest pace since Q4 2021 and that while most components continue to increase “many of these increases were smaller than they have been”.
- Inflation was driven by medical services (+4.2%), tertiary education (+9.7%), gas & other household fuels (+14.3%) and domestic holiday travel & accommodation (+4.7%). Food prices rose 1.6%. Goods prices eased to 7.6% y/y from 9.5%, as retailers discounting saw some goods prices fall.
- The domestically-driven components didn’t show signs of easing in Q1 with non-tradeables rising to 7.5% y/y from 7.4%, a new series high, and services up 6.1% y/y from 5.5%, the highest since 2001. Cost of living pressures remain acute with non-discretionary inflation above headline at 7.2% y/y.
- The RBA has highlighted in the past the risk to price stability from energy and rents. These components rose strongly in Q1 with rents up 4.9% y/y from 4% nationally and gas & electricity up 26.2% y/y (17.4%) and 15.5% (11.7%) respectively.
- The monthly CPI for March moderated for the third consecutive month to 6.3% from 6.8% helped by lower auto fuel prices and an easing of new dwelling costs to 11.1% y/y from 13%, but ex volatile items it was steady at 6.9% y/y. But seasonally adjusted it rose 0.5% m/m after 0.6%.
Australia non-tradeables vs tradeables CPI y/y%
Source: MNI - Market News/Refinitiv
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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