Results:
The ‘headline’ CPI for Q1: 0.6% q/q
- expected +0.8%
- prior was +0.8%
For the y/y: 2.9%
- expected is 3.2%, prior 2.7%
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Australia ‘Trimmed Mean’ Q1 CPI: 0.5% q/q
expected 0.7%,
prior 0.9% q/q
For the y/y: 2.6%
expected 2.9%, prior 2.6%
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Australia ‘weighted median’ CPI: 0.6% q/q
expected 0.7%, prior was 0.9%
For y/y: 2.7%
- expected 2.9%, prior was 2.5%, revised from 2.6%
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Says the Australian Bureau of Statistics: Over the twelve months to the March quarter 2014:
- Tradables component rose 2.6%,
- While the non-tradables component rose 3.1%
- This compares to the rises of 1.0% and 3.7% respectively through the year to the December quarter 2013.
(i.e. good deceleration in non-tradables)
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All CPI reading in lower than expected and the AUD is marked down immediately. It is the ‘trimmed mean’ and the ‘weighted mean’ figures that are of most interest to the RBA, not the headline figure. So while the headline figure is the one that is highest and will … errr … make the headlines, the lower than expected trimmed and weighted means will be welcomed by the RBA. The RBA is focused on growth and now that the inflation scare of the Q4 2013 seems to have reduced … This cements the RBA’s neutral bias.
There is no rate hike in sight, not even close.
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While there are bids around 0.9300, and given the response of the AUD, also around 0.9315/20, expect offers to come into the market now around 0.9335/40 on any bounce. I’ll try to get a refreshed orderboard ASAP.
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ADDED: Analyst reactions: Australian CPI – analysts react
