Australia: Q3 CPI to have risen by a modest 0.5% q/q – RBC CM

Adam Cole, Research Analyst at RBC Capital Markets, expects Australia’s Q3 CPI to have risen by a modest 0.5% q/q (in line with consensus), with the y/y rate little changed at 1.1%.

Key Quotes

“Base effect should start to see headline inflation move higher in 2017 and we may currently be near the nadir. The all-important core measures—weighted mean and trimmed median—should rise by just under 0.5% on average, taking the y/y rate marginally higher to 1.6%. It will, however, remain well below the floor of the RBA’s 2–3% target range.

We note that the RBA has set the bar reasonably low following the sharp downward revisions to its inflation forecasts in May and is expecting an outcome of ~0.4% for the core measures.”