Analysts at Australia and New Zealand (ANZ) banking group mentioned within the newest analysis report that the Australian Q2 inflation information doesn’t change their name for a 50 bps fee hike by the Reserve Financial institution of Australia (RBA) in August.
“Australia’s Q2 CPI got here in beneath our expectations, with headline inflation at 6.1% y/y and trimmed imply at 4.9% y/y. It seems like we’re shifting previous the height in quarterly inflation, nevertheless it’s a excessive peak to return down from, with the quarterly outcome annualizing at 7.4% for headline and 6.1% for trimmed imply.”
“This doesn’t change our view on the RBA’s near-term conferences, the place we count on 50bp hikes. The goal money fee continues to be properly beneath the RBA’s estimates of impartial, and we count on the labor market to proceed tightening. This may immediate the RBA to take the money fee above the decrease sure of what it deems the impartial vary. As such, we keep our 3.35% year-end forecast.”