Softer Australia CPI but RBA still hawkish – Rabobank

Rabobank’s day-ahead section highlights Australia’s August CPI as slightly softer, with headline inflation at 0.4% m/m and 4.0% y/y, and trimmed mean at 0.2% m/m and 3.6% y/y. Earlier in Q3, the RBA delivered another rate hike and is seen tightening again in the new year. Weak building approvals contrast with booming data centre activity, shaping Australian Dollar prospects.

Inflation data and RBA outlook

"In Q3, we got the RBA (who just hiked again yesterday and are seen doing so again in the new year), the ECB, the BOJ, plus the Fed – and the issue is how much more might be needed there and elsewhere."

"Today’s Australian August CPI was a tick softer headline at 0.4% m-o-m and 4.0% y-o-y, the latter double target, and at 0.2% m-o-m --but 3.6% y-o-y-- trimmed mean."

"However, building approvals tumbled 6.1% m-o-m even as data centres are booming."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)