Aussie CPI (YoY) Oct: 6.9% vs. est 7.6% and prev 7.3% fails to excite
|The new monthly Consumer Price Index report for Australia has been released.
Its coverage is only partial, so there is less weight given to the data in markets that await the quarterly report as the benchmark for the Reserve Bank of Australia
The data arrived as follows:
Aussie CPI (YoY) Oct: 6.9% vs. estimated 7.6% and previous 7.3%.
Westpac looks for quarterly inflation to peak at 8.1% in Q4.
AUD/USD update
The Aussie has stuck to being flat for the day around 0.6685.
However, the price is on the backside of the trend so there could be a phase of distribution to play out over the coming days between a wide 0.6800/ 0.6600 range for the parameters hold. While there is liquidity on either side of the range, the downside bias is in play while below 0.6700 resistance:
Meanwhile, the National Australia Bank updated on their latest outlook for the Reserve Bank of Australia:
We expect the (monthly CPI) data to further solidify the need for the RBA to continue hiking in the near term and see the RBA hiking rates by 25 bps in December, February, and March to 3.60%.
Thereafter the key for the RBA outlook is whether wages growth remains consistent with a return of inflation to target as we assume – Governor Lowe has previously cited WPI wages growth of around 3½-4.0% as being consistent assuming a 1% productivity assumption.
In the coming months, the market services components of CPI will be watched closely given its sensitivity to wage outcomes and the tendency for services inflation to be stickier than for goods.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.