• For the y/y comes in at +2.8% ( prior was +2.7%.)
  • Trimmed Mean +0.5% m/m, and +3.1% y/y

Just adding a little more to the original post (link above):

  • Fastest on-month pace since December 2013
  • The y/y is at its highest rate since September 2011.
  • Tradable inflation fell 0.4% m/m (+0.3% y/y) in April, the first drop since January
  • Non-tradable inflation accelerated to a level last seen in July 2013: +0.9% m/m and +0.2% y/y
  • While Q1 official inflation (Australia Q1 2014 CPI – all the results & what it means for the Australian dollar and more at Australian CPI – analysts react) showed lower-than-expected inflation as both tradable and non-tradable inflation slowed
  • But today’s first look at inflation for Q2 shows “an alarming jump in headline and trimmed mean inflation, of which only a portion can be attributed to seasonality, with annual rates for both measures sitting on top of the RBA’s two-to-three percent target band” (TD quote)

More from TD Securities (head of Asia-Pacific Research Annette Beacher):

  • “We don’t share the market view that the RBA is set to leave the cash rate at its record low 2.5% for another year. The recent ‘soft’ March quarter CPI report masked the nasty surprise that annual tradable inflation jumped to a mid-target pace after two years of deflation. This unwanted inflation, combined with a robust housing sector and signs that prior savings are re-fuelling consumption, suggests that the case for holding the cash rate at record low levels is no longer there”
  • “There is clear evidence that the economy is returning to trend growth, employment momentum is building and inflation pressures are not abating. These factors are expected to more than offset whatever lies within the May 13 budget”

Beacher continues to expecte the RBA will lift the cash rate by 50 basis points by the end of 2014

Oh, and I thought this was a good point raised by Dr Shane Oliver, Head of Investment Strategy and Chief Economist, AMP Capital:

  • The rise in TD Inflation Gauge also suggests zero scope for theRBA to respond to tax cuts/excessively tough budget with rate cuts

Added from Westpac, after discussing the data result:

  • More critically, the net balance (number of price rises less number of price falls) was 19 in April from 18 in March and 17 in February.
  • As such, it is holding above the long run average of 10. Westpac estimates a positive seasonality in April, the adjusted net balance was 17 compared to 21 in March. The recent low was 3 last November.
  • In the March quarter, the CPI surprised with a modest 0.6% qtr and as such, left the Gauge tracking well ahead of it. The April report suggests the Gauge continues to run well ahead which, if history does repeat, suggest that at some point the CPI will catch up. So for now, the Gauge suggests some upside risk for the Q2 CPI.
  • Westpac’s is currently reviewing our Q2 CPI forecast. As it stands, our forecast is for a 0.5% qtr rise but we have a lot of partial information to process before we lock in an estimate.