This via Westpac on today's inflation data from Australia

In brief:

  • With the headline measure printing below market expectations (0.2% compared to 0.4%) why did the core measure rise as expected (0.5%)?
  • It is all due to rent and dwelling purchase prices, which have a large weight and tend not to get trimmed out of the core measures, rising much as expected.
  • June quarter CPI continues to highlight the lack of any broad inflationary pressures in the Australian economy.
  • While core inflation has drifted up to just under the bottom of the RBA's target band, on the back on a lift in housing cost, it is hard to see how it can accelerate much further without broader price gains. We doubt, very much, this can be done by housing costs alone.

(bolding mine)