**As seen in Risk In The Week report 04/521/253, subscribe at cablefxm.co.uk/reports
Australian Q4 consumer prices accelerated to 7.8% from the prior 7.3%, this was faster than the survey median forecast of 7.5%. Consumer prices came in at 1.9% on the quarter vs the prior 1.8%, this was higher than the consensus of 1.6%. Inflation is expected to have peaked over the fourth quarter of 2022 as estimates pencil prices to ease down to 6.9% in Q1. The monthly inflation indicator slowed to 0.3% M/m in March, this translated into a 3-month annualized rate of 1.6% (the figure ticked at 2.1% in January). March trimmed mean inflation rose by 0.4% M/m vs a prior of 0.7%. The most recent minutes of the RBA’s monetary policy meeting showed the board reiterating its inflation forecast, they do not see prices coming back to target until mid-2025. We advise skepticism over RBA’s long-term forecasts given the recent track record, they have a poor forecasting hit ratio when it comes to inflation. The minutes also showed that the board considered not pausing in April, a 25bps Cash Rate hike was on the table given the high level of inflation and the tight labour market. The desk at ANZ penciled inflation falling to 6.9% in Q1, this in line with the consensus, they noted that the RBA is comfortable as prices appear to be falling faster than their own projections. ANZ said the central bank is likely to leave the Cash Rate on hold in May, however, they expect another rate hike in August as trimmed mean and services inflation prove to be more sticky than expected. ANZ sees the trimmed mean inflation to print at 1.5% Q/q and 6.8 Y/y in Q1.
Comentarios