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❗️🇦🇺Cable FX Macro Weekly Note: Australia May Consumer Prices

**As seen in Risk In The Week report 06/22/24, subscribe at

The monthly inflation indicator saw an uptick in April, the CPI printed at 3.6% Y/y, which was above the consensus forecast of 3.4%. This is the second consecutive acceleration in the monthly figure, and it shows no progress being made so far this year. Also, analysts now debate whether the RBA will be holding for longer or hiking rates. Cash Rate futures imply no move from the central bank this year, traders have pared easing bets as futures had seen 20bps of easing back in April and as much as 60bps at the beginning of the year. Australian producer prices have seen leading consumer inflation during this cycle, the measure is also accelerating and now stands at 4.3% Y/y in Q1.

NAB analysts will be focusing on the May release to reassess their Q2 CPI forecast (releases July 31), they said that any upside surprise might be absorbed by the RBA as the bar to deliver another hike is higher than last year. However, NAB warned that further tightening from the central should not be discounted completely. NAB pencils inflation rising at 3.6% Y/y in May, they see the RBA holding rates before cutting in November.



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