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MNI (London)
By Lachlan Colquhoun
     SYDNEY (MNI) - Australian Consumer Price Index data for the first quarter
of 2019 will be released by the Australian Bureau of Statistics Wednesday. Here
are five factors to note ahead of the release.
Expecting a slowdown. 
Inflation for the final quarter of 2018 was 1.8%, down from 1.9% in the previous
quarter. The market is expecting the slowdown to continue, with some analysts
anticipating a fall as low as an annualised 1.6% for Q1, with a quarterly
increase of only 0.3%.
Critical for RBA outlook. 
Minutes from the April board meeting of the Reserve Bank of Australia spelt out
the conditions in which the Bank would consider a rate cut: higher unemployment
and lower inflation. Unemployment ticked 0.1 points higher last week to 5.0% and
the inflation data will be closely watched as an indicator of RBA intentions.
Official rates have been held at a record low 1.5% since November 2016 and the
Bank has gradually changed in outlook in the last six months and become more
dovish as the economy has slowed.
Under the RBA target range. 
The RBA target range for inflation, and the range in which it might consider a
rate rise, is between 2 and 3%. It has been three years since inflation was
within the RBA target, and there is very little possibility it will return there
tomorrow.
Fuel prices lower.
Fuel prices rose sharply in October 2018 but fell hard in the last two months of
2018. For the final quarter of 2018, automotive fuel prices fell 2.5% after
rising 1.4% in Q3. Despite a recent uptick, fuel prices - along with falls in
prices for clothing and holidays - are expected to keep tomorrow's result low.
Smokers Hard Hit.
Government taxes sent tobacco prices soaring by a 9.4% for the last quarter of
2018, while the ongoing drought and seasonally availabilities continue to impact
on grocery prices, with the price of fruit increasing by 5%. It is a measure of
how anaemic inflation pressures are that the figure is buoyed by Government
taxation measures and natural disasters.
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: MALDS$,M$A$$$,M$L$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com