Aus headline CPI is now in the RBA's 2-3% target band for the first time in 9 quarters - GS

Analysts at Goldman Sachs out with their afterthought on the latest Australian Q1 2017 CPI report.

Key Headlines:

The data is not a touch weaker than expected

Important to note that there is a clear reacceleration at both the headline level (2.1% YoY vs. 1.5% last quarter) and underlying levels (Trimmed Mean: 1.9% vs. 1.6% last & Weighted Median: 1.7% vs. 1.4% last)

Headline CPI is now in the RBA's 2-3% target band for the first time in 9 quarters

Headline CPI would have to print incredibly soft (0.1-0.2% QoQ) next quarter in order to undershoot the RBA's forecasts

We think this is very conservative and hence we see upside risks to the RBA's forecast

We think there is sufficient momentum for RBA to upgrade their headline inflation forecasts over next few months and their underlying inflation forecasts later this year

On AUD:

AUDUSD rallied from 0.7535 to 0.7557 highs going in. and subsequently printed 0.7509 lows/0.7513 last

AUDNZD traded from 1.0855 to 1.0865 ahead of the number, then 1.0823 lows/1.0827 last

From a fundamental perspective, this weakness is probably a fade