Australian Q4 inflation data - "This was a soft update on inflation"

Westpac's take on the Q4 inflation data

The data is here from earlier

From Senior Economist Justin Smirk:

• This was a soft update on inflation
• The critical bit of new information is the more rapid than expect shift in dwelling price inflation
• This matters as given the large weight for dwellings (almost 9% of the CPI) where dwelling price go so too does non-traded inflation and, more importantly, core inflation.
• It is clear the dwelling prices are on a much softer trend in Sydney. This has the potential to lower not only near term headline inflation outlook (even allowing for some pickup in the pass through of the weaker AUD) but more critically to drag core inflation below the bottom of the RBA's inflation band
• The six month annualised pace of core inflation came in at a below the band pace of 1.7%qtr, the second quarter in a row it has been below the band. Core inflation remains on track to dip below the RBA's inflation band if it continues at its current pace.

(bolding above is mine)