Inflation data from Australia for the April to June quarter

'headline' 0.2% q/q ... lower than was expected for the headline, but be sure to check out the 'core'

  • expected +0.4%
  • prior was +0.5%

For the y/y, headline inflation is 1.9%

  • expected 2.2%
  • prior 2.1%

Trimmed mean (the measure the RBA pays most heed to - the 'core' inflation figure. The RBA target band is 2 -3%)

0.5 % q/q ... in line with expected

  • expected 0.5%
  • prior 0.5%

1.8% y/y ... in line with expected

  • expected 1.8%
  • prior 1.9%

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Weighted median CPI: 0.5% q/q ... in line with expected

  • expected 0.5%
  • prior was 0.4%

And 1.8% y/y ... higher than expected

  • expected 1.7%
  • prior was 1.7%

AUD/USD has been marked a little lower, under 0.7900 in the immediate aftermath and just above as I update.

The 'headline' lower is on the back of both higher and lower fruit and veg prices (see below for ABS commentary) - a volatile component and non-core. The 'core' measures are steady.

Says the ABS:

  • Chief Economist for the ABS, Bruce Hockman, said: "Inflation in Australia remains low. Price falls for automotive fuel; and ongoing competition in the clothing and food retail markets has contributed to this quarter's result. In addition, the ABS continues to closely monitor the impact of Cyclone Debbie on fruit and vegetable prices. While strong price rises were recorded for select fruit and vegetables such as tomatoes, beans, cucumbers, melons, berries and bananas in the June quarter 2017 - these rises were offset by falls in seasonally available fruits such as oranges, mandarins and apples."
  • The most significant price rises for the quarter were medical and hospital services (+4.1 per cent), new dwelling purchase by owner-occupiers (+0.9 per cent) and tobacco (+1.0 per cent). These rises are partially offset by falls in domestic holiday travel and accommodation (-3.2 per cent) and automotive fuel (-2.5 per cent).

With headline inflation 'missing' on estimates and the core in line and still below the lower bound of the Reserve Bank of Australia target band there is no case here for an early rate rise. The subdued AUD response is probably about right - no case for a rate hike, no case for a rate cut ... neither was on the cards anyway .... as you were. Sellers will not be uncomfortable with the CPI results, nor will the buyers. Over to Governor Lowe now, due at 0305GMT (see below)

More:

Tradables fell 0.3% this quarter

  • Over the last twelve months, the tradables component rose 0.4% (+1.3% the prior report)
  • Price changes for the goods and services in this component are largely determined on the world market
  • The tradables component represents approximately 35% of the weight of the CPI

Non tradables rose 0.4% this quarter

  • rose 2.7 y/y (+2.6% prior report)
  • Price changes for the goods and services in this component are largely determined by domestic price pressures
  • The non-tradables component represents approximately 65% of the weight of the CPI

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Earlier on we got skilled job vacancy data from Australia, up 0.9% m/m (prior was +1% m/m, a downward revision from +1.2%)

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Still to come in Australia today, at 0305GMT Reserve Bank of Australia Governor Philip Lowe speaks. His topic is "The Labour Market and Monetary Policy"