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:
Westpac's take:
This take is spot on:
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.
