Australia's inflation nightmare - Australia's inflation rate is the highest globally

Analysts at a top Australian investment banking firm, Barrenjoey Capital Partners, point out that Australia's recent inflation performance is just about the worst on the planet:

• "Using the trimmed mean is preferable – Australia's six month annualised rate of trimmed mean inflation of 3.6% is the highest inflation globally (higher even than the US at 3.2% 6mAR trimmed)."

Data info is here from Wednesday's release:

• Australian Q1 CPI +1.0% q/q (expected 0.8%) 3.6% y/y (expected 3.4%)

Westpac's take:

• Australia- inflation a bit higher than expected, RBA on hold

This take is spot on:

• 4 reasons why the RBA may be the last major central bank to cut rates

The stunning higher than expected across-the-board inflation readings are reverberating through markets.

Via Commonwealth Bank of Australia:

• yield on the three‑year Australian government bond jumped by 13bp to 4.03%
• Interest rate markets are now pricing only a small chance of a sole 25bp rate cut by the end of the year

TD say to forget about a Reserve Bank of Australia rate cut in 2024 due to:

• strong employment market
• ongoing high migration into Australia
• rising energy prices

And conclude:

• "The RBA is likely to adopt a more hawkish stance, but one that it's loath to act upon,"
• expect the first cut now in February 2025

***

From the front page of the RBA website. The RBA target band for inflation is 23 to 3%. Not rhere yet.