I posted a preview yesterday: Australian Q2 inflation data due this week - preview
Here is the rundown of what is expected etc. for today's Q2 CPI
The 'headline' result is the q/q CPI for Q2:
- expected is +0.4%,
- prior was +0.5%
For the y/y, expected is 2.2%, prior 2.1%
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For the 'trimmed mean' (which is the measure the RBA pays most heed to): it is the 'core' inflation figure where the RBA target band is 2 -3%.
For the q/q:
expected 0.5%,
prior 0.5%
For the y/y:
expected is 1.8%, prior 1.9% ... as you can see the expected and the most recent are both below the target band. Not by much, but still.
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Finally, there is the 'weighted median' CPI:
For q/q: expected is 0.5%, prior was 0.4%
For y/y: expected is 1.7%, prior was 1.7% ... and ditto for below the target band
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Surprises to the topside should be supportive of the AUD, inflation is a key missing ingredient in the argument for rate hikes in Australia (there are other missing ingredients, but low wage growth and low inflation is a biggie). Downside surprises should, on the other hand, be a weight and will increase focus once again on the key 0.8 level for the AUD/USD as resistance.
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Preview via RBS (bolding mine):
- We look for the CPI to have increased 0.5%q/q, 2.3%y/y in Q2.
- Food prices were higher in the quarter following inclement weather on the east coast, which will more than offset a small fall in fuel prices.
- Stripping out the noise, we expect the average of the underlying rates will slow a tick to 1.7%, consistent with limited growth in unit labour costs and muted inflationary pressures in service sectors.
- Looking ahead, sharply higher energy costs from 1 July will see headline rates accelerate further over H2'17, with some spillover into core inflation likely.
