I'm tempted to answer "up **** creek", but this is a family website.
This assessment of the Australian CPI data earlier from ING. In brief:
Australia's 3Q22 CPI index rose at a 1.8%QoQ pace, no slowdown from the pace of growth recorded in 2Q22, and this took the headline inflation rate to 7.3%, beating the consensus expectations for a 7.1% inflation rate. But the bad news doesn't end there. Core measures of the inflation rate, which might have tempered any outsize rises in erratic items driving the headline index, also showed larger-than-expected rises.
Where does this leave the RBA
- At their October meeting, the RBA dropped the pace of their tightening to 25bp, hinting that they would prefer to move ahead at a slower pace as they pushed rates into restrictive territory.
- Today's inflation data suggest that this moderation may prove short-lived. It is hard to see how the RBA can ignore such an outsized miss on inflation, even though they have been clear in their statements that they didn't think inflation had yet peaked. This inflation data adds pressure on the RBA to revert to a 50bp tightening pace next month. Though if the wage price data out on 16 November remains moderate, they may be able to drop back to a 25bp rate at the December meeting.
Data is here ICYMI:
I posted earlier on the quicker-to-move RBNZ and how inflation pressures in New Zealand are still "intense".
And just a few moments ago Australia's smooth-talking Treasurer expressed confidence that the CPI would soon top out:
Let's see if the forecasts prove correct or if the confidence of the RBA and Treasury is misplaced. Given the priors of bureaucratic performance, I am not hopeful.
AUD/USD update:
