The data is here (in brief, headline higher than expected, core measures still on the weak side)

JP Morgan:

  • "We think the overshoot on consensus was due to fruit prices. They were very strong.
  • The core numbers were pretty close to expectations.
  • In terms of what this means for the RBA we think they are going to remain on hold next week and the rest of this year.
  • But we still think inflation, particularly core inflation, is quite low and that means you're likely to see further rate cuts in the first half of 2017.
  • Everyone had forecast for annual inflation to move higher. And that's been the case so you can probably say that we've seen the low point. But that said, inflation still remains very low particularly the core measure."

(JPM comments via Reuters)


  • Strong headline data is due high due to fruit, electricity & cigarettes
  • The 0.7% headline is important - it means inflationary expectations don't drop too low
  • It probably marks the low point for y/y headline CPI for some time
  • Core measures were again low ... but broadly in line with RBA forecasts


  • Higher prices for fresh fruit and vegetables have pushed Australian inflation higher in the September quarter
  • But core measures of inflation, which have greater influence over the Reserve Bank of Australia's willingness to tinker with interest rates, remained subdued


  • In line with the RBA's forecast
  • Coupled with mixed data, it very much suits The RBA "staying on hold for some time"
  • Probably well into 2017
  • There remains an implicit easing bias
  • Unlikely to be exercised any time soon


  • High headline number but core measures "look much better behaved"
  • Inflation is still low in Australia
  • Door still open to a rate cut "Whether we see that next month or the Reserve Bank prefers to wait a little bit longer, is still an open question"
  • CBA assess that its probably fair to say that in underlying terms the inflation rate has probably bottomed
  • Key inflation drivers look very subdued
  • Labour costs "pretty much dead in the water"
  • Pick-up in the AUD in the last couple of months will weigh on inflation also