AUD: CPI dented market expectations of an RBA rate cut - SocGen

Kit Juckes, Research Analyst at Societe Generale, notes that the Australia’s Q3 headline inflation picked up to 1.3% from 1%, more than expected, which dented market expectations of an RBA rate cut.

Key Quotes

“The RBA’s favoured measure, the trimmed mean CPI, is steady at 1.7% and the data don’t seem to us to rule out a further cut in due course, but AUD has rallied. Our bias with the AUD is still only to buy it against the New Zealand dollar, where rate differentials are pretty compelling and the Kiwi still looks overvalued.”