I posted earlier on this:
However, most folks were too busy trashing equities to take much notice. :-D
So:
0130 GMT Australia inflation data – Q1 2022 CPI. We only get official Australian inflation data once a quarter, so this data is a focus. Its even more of a focus today due to the RBA looking to time its 'lift off' interest rate hike. June (meeting is the 7th) is the consensus. Expectations for a May (meeting is the 3rd) hike might very well rise if today's CPI results show greater than expected (we'll soon find out). There is an Australian federal election due on May 21 and while the RBA does not let politics interfere with its independence (yeah, right) it is perceived that a hike during the campaigning is a complication for a May rate hike.
Headline
• expected 1.7% q/q, prior 1.3%
For the y/y,
• expected 4.6%, prior 3.5%
Core inflation:
Trimmed mean (this is the main measure the RBA will be looking at)
• expected 1.2% q/q, prior 1.0%
• expected 3.4% y/y, prior 2.6% (the RBA target band is 2 to 3%, "on average, over time" (quote from the RBA).
Weighted median
• expected 1.1% q/q, prior 0.9%
• expected 3.3% y/y, prior was 2.7%
WPAC note (in brief from a longer piece)
- The ongoing disruptions to supply lines and the robust strength of domestic demand reflects more broad-spread inflationary pressures, thereby supporting a 1.2%qtr (3.4%yr) gain in the trimmed mean measure.
NAB is looking for 1.2% q/q in the trimmed mean (a measure of core inflation), and 3.4% y/y.
3.4% is a post 2009 high and above the top of the RBA's 2-3% band.
BNZ:
- The all-important Australian CPI release takes place this afternoon. The key number for the market is the trimmed mean core inflation measure
- The market is pricing a high chance of a ‘mini’ 15bps RBA hike next month, which would take the cash rate back up to 0.25%.
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Also at 0130 GMT is data from China, Industrial Profits for March
- prior 4.2% y/y and 5.0% YTD y/y
COVID-19 lockdowns will be a constraint on profits in March. The disruptions are ongoing so looking ahead to April its difficult to see much of a recovery. Between the China slowdown and the Federal Reserve set on an aggressive hiking path global growth is looking less robust.
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China slowdown and the Federal Reserve are two influences on oil right now. Prices have recovered since weakenss on Monday. But, I digress ...
