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.
May headline CPI inflation came in well below expectations at 5.6% y/y after 6.8% in April, the lowest since April 2022. As the details of the April data were not as strong as the headline, neither is May as soft as it looks. The moderation in the annual rate this month was significantly helped by base effects as May 2022 rose 1.1% m/m but May this year was flat on the month, signalling an easing in headline price pressures. The underlying measures moderated but not by as much and continue to signal that core is slower to come down. Ahead of the July 4 RBA meeting the labour market remains very tight but inflation pressures are easing but in line with its forecast so far.
- The ABS specifically pointed to the CPI ex volatile items & holiday travel series to look through some of the recent volatility. It rose a solid 0.5% m/m to be up 6.4% y/y, down slightly from April’s 6.5%. It peaked in December at 7.3% and is now down 0.9pp compared with headline’s -2.8pp. The trimmed mean moderated to 6.1% in May from 6.7% and is 1.1pp below its peak. Underlying inflation is stickier and now running above headline.
- The ABS noted that prices for most items are still rising but by less than they have been. The largest positive contributors to inflation were housing (+8.4% y/y), food (+7.9%) and furniture & household items (+6%) but fuel fell 8% (driven by lower global prices). New homes rose at their lowest since November 2021 (+8.3%) but rents continued to rise at +6.3% y/y in May up from 6.1%.
- ABS noted that higher rents, wages & utilities were being passed on by restaurants to customers.
Source: MNI - Market News/ABS
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.