Australia released its Q4 inflation figures earlier today

The data release can be found here.

Overall, it's not an awful set of readings - but the only thing it does is add towards the uncertainty of the timeline on when the RBA will act towards tightening monetary policy.

Anyway, here are more responses from economists:

JP Morgan (Ben Jarman):

The Australian CPI reading for Q4 was weak, despite the anticipated support from very large increases in volatile items such as fresh food, fuel, and tobacco being realised.

The diffusion index measuring the proportion of basket items running below the bottom of the RBA's 2-3% target band rose to 67% in Q4, back to the all-time highs. This supports our view that the RBA is unlikely to be hiking any time soon.

ANZ Bank (Joanne Masters):

The Q4 inflation print was a touch below expectations for headline, but in line with our expectations for core. Overall, it was a solid result, particularly given the drag from the re-weighting.

Overall the data suggests that inflationary pressures have stabilised just below the policy band and should rise gradually over time. We see this data as consistent with our view that the RBA will look to raise rates this year, with a focus on bringing the real cash rate back to zero.

We continue to look for the first of two rate hikes in May, although this is based on our forecast that the wage price index prints a 0.5% quarterly rise for Q4 [when released in late February].

Commonwealth Bank of Australia (Kristina Clifton):

The RBA will have the chance to give their perspective on today's CPI outcome, and other recent economic trends, in the statement accompanying the Board meeting next Tuesday and the quarterly Statement on Monetary Policy on Friday next week.

We expect the RBA will be comfortable with today's outcome as it broadly lines up with their projections for both headline and underlying inflation. All in all there is nothing in today's outcome or the recent economic data to change our view that the cash rate is on hold until late this year.

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