Australia: Modest increase in December headline inflation - TDS

Analysts at TD Securities point out that Australia’s monthly headline inflation rose modestly in the Dec qtr, +0.5%/q monthly average and +0.4%/q mid-month of the quarter.

Key Quotes

“The Inflation Gauge measure tends to slightly overestimate headline CPI for Q4, and adjusting for this systemic bias we expect 'top down' headline CPI to lift by +0.4%/q and by 1.7%/y. As does consensus.”

“We look for Dec qtr trimmed mean to increase by +0.4%/q (Inflation Gauge +0.35%/q) leaving the annual pace all but unchanged at 1.78%/y, and combined with a +0.5%/q lift in the weighted median measure (1.69%/y) we see overall annual underlying inflation trekking sideways at 1.75%/y, similar to the Sep qtr print (excluding revisions).”

“TD is bang on consensus this time around. Market median for trimmed mean is +0.4%/q, followed by +0.5%/q, within a relatively wide +0.3% to +0.6%/q. Weighted median is also within the same range, although +0.5%/q outpaces +0.4%/q. With such a near-unanimous prediction at +0.4/+0.5%/q the risk of a "surprise" on the day for markets is high.”