VIEW: NAB: Monthly CPI Of Some Comfort

NAB note that the monthly CPI print “was noticeably softer than consensus with a greater than expected fall in ‘holiday travel and accommodation’, but we remain cautious in overinterpreting the monthly indicator, including due to incomplete coverage of the basket, and the seasonally adjusted series slowed less sharply to 7.1% y/y from 7.3%. On balance, today’s data will likely suggest to the RBA that Q1 inflation is unlikely to exceed their February forecasts, which saw trimmed mean inflation at 1.4% q/q. Looking to the April RBA meeting, the RBA had indicated that they were focussed on the data before ‘reconsidering’ the case for a pause. Today’s data leaves the risk of a pause, but our view is that recent employment data and the NAB Business Survey would suggest it is too early.”