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Q2 CPI Focus Of Week, Watch Services Component

AUSTRALIA DATA

The focus of the week is going to be Q2 CPI data out on Wednesday. With the goods/services and tradeables/non-tradeables breakdowns, it is likely going to be the key component in the August 1 RBA meeting. Friday’s June retail sales will also be important.

  • Q2 CPI is expected to rise 1.0% q/q to be up 6.2% y/y down from 1.4% and 7% in Q1. While this would be lowest since Q2 2022, both the annual and quarterly rates would be elevated. Trimmed mean is forecast to rise 1.1% and 6% down from 1.2% and 6.6%. The domestically-driven components of the release are likely to be the focus.
  • June CPI also prints on Wednesday and is predicted to rise 5.5% y/y after May’s lower-than-expected 5.6%.
  • On Friday June retail sales are released and are expected to be flat after rising a robust 0.7% m/m in May which was boosted by discounting.
  • Q2 PPI is also out on Friday and Q2 trade prices on Thursday, which are expected to show a sharp drop in export prices of 6.7% q/q. Import prices should post a more moderate decline of 0.8% q/q.

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