VIEW: CBA Expects CPI To Rise To 3.8%

Australian February CPI prints on Wednesday and Bloomberg consensus has a small 0.1pp rise to 3.5% y/y but forecasts range from 3.3% to 3.8%. Commonwealth Bank is one of the forecasters predicting a rise to 3.8% y/y. It expects Q1 trimmed mean to rise 0.8% q/q when the quarterly data is released on April 24.

• “The January result printed at 3.4%/yr and we expect a lift to 3.8%/yr as we had flagged in January.”
• “We expect a bounce in the print as less components are imputed this month. An end to seasonal goods discounting and higher fuel prices will also contribute to the lift. Offsetting though will be a seasonal fall in holiday travel prices.”
• “We continue to expect a large contribution from the housing component through strong rents, elevated new dwelling costs and unwind of electricity rebates in WA. Education costs are also measured this month and we expect an increase.”