Data nails on a shallow rate-easing path going forward
Year-on-year inflation in Australia came to 3.8% in October, far surpassing the 3.6% market consensus prediction.
It makes for another surprisingly heavy inflation read following the 3% year-on-year rise in the September quarter, which all but confirmed the RBA’s decision to hold rates at 3.6% this month.
Year-on-year trimmed mean inflation – the RBA’s preferred inflation metric that shapes monetary policy – came to 3.3%, overshooting both market forecasts and last month’s read.
The largest contributor to annual inflation was housing, which was up 5.9%, primarily due to electricity costs and rents.
Food and non-alcoholic beverages, and recreation and culture, were the next biggest risers at 3.2% each.
This latest data nails on a shallow rate-easing cycle going forward.
Major banks are all singing from the same hymn sheet, with NAB telling consumers to prepare for a soft landing and ANZ warning that the RBA is becoming more hawkish.
