A nice surprise for the monthly inflation data point. While it was always likely that the Reserve Bank of Australia will be paying more attention to the quarterly CPI reading due just ahead of its November policy meeting this sign of slower inflation will be welcome and concretes in an 'on hold' RBA decision at the upcoming meeting on September 5.
Background to this:
- RBA’s own staff could be signalling low faith in durably hitting the Bank's CPI target
- Preview of Australian July inflation data due mid-week. A key release for the RBA and AUD.
The monthly CPI indicator does not reflect the full basket of consumer goods in each month and has only a short back history. The quarterly CPI is more complete is the standard reference for inflation in Australia. We get the next quarterly reading, for Q3, in late October.