The headline data came in as expected but its the core data that surprised to the topside:
The Reserve Bank of Australia's preferred data point from this is the 'trimmed mean:
Trimmed mean 0.7% q/q
- expected 0.5% q/q, prior 0.5%
and 2.1% y/y
- expected 1.8% y/y, prior 1.8%
That core inflation measure is now within the RBA target band (the band is 2 to 3%, so at 2.1% just above the lower bound). The trimmed mean is at its highest since 2015.
As I said in the data post, linked above, it'll take more than this one reading to shift the RBA. The Bank has said time and again it does not expect conditions to be in place prior to 2024 (at the earliest) for it to raise the cash rate. Nevertheless, this is a chink in the armour and the Australian dollar was marked a little higher in the wake of the Australian Bureau of Statistics inflation data:
