Australia Q2 CPI Rises 0.6%, Slashing Odds of an August RBA Hike to 4%
Updated
Updated · WTVB · Jul 29
Australia Q2 CPI Rises 0.6%, Slashing Odds of an August RBA Hike to 4%
3 articles · Updated · WTVB · Jul 29
Summary
Australia’s CPI rose 0.6% in the June quarter after 1.4% in Q1, while annual inflation eased to 4.0% and core inflation came in below forecasts.
Fuel drove much of the slowdown: June CPI fell 0.1% on the month as petrol prices plunged nearly 11%, pushing annual June inflation down to 3.8%.
Markets reacted quickly, cutting the chance of an RBA rate increase next month to 4% from 21%; the Australian dollar fell 0.3% and 3-year yields dropped 10 basis points.
Housing still complicates the outlook, with new dwelling prices up 5.8% in June, rents holding at 3.6%, and services inflation accelerating to 4.0%.
That leaves the RBA, which has already lifted rates three times this year to 4.35%, balancing softer headline inflation against persistent domestic price pressures and a resilient labour market.