Australia's Q1 CPI disappoints, keeps rate hikes off table

Following the below expectations Australia's Q4 2017 CPI readings, today's inflation figures for the Q1 showed a mixed picture, with the headline figures missing expectations. The core figures, came in a tad firmer, still leaving the annualized inflation rates well below the Reserve Bank of Australia’s (RBA) 2-3 percent target range.

Main headlines

Q1 CPI headline q/q +0.4% vs 0.5% exp and 0.6% prior

Q1 CPI headline y/y +1.9% vs 2.0% exp and 1.9% prior

RBA trimmed mean +0.5% vs 0.5% exp and 0.4% last

RBA trimmed mean y/y +1.9% vs 1.8% exp and 1.8% last

MARCH KEY FIGURES

THE ALL GROUPS CPI

• rose 0.4% this quarter, compared with a rise of 0.6% in the December quarter 2017.
• rose 1.9% over the twelve months to the March quarter 2018, compared with a rise of 1.9% over the twelve months to the December quarter 2017.

OVERVIEW OF CPI MOVEMENTS

• The most significant price rises this quarter are secondary education (+3.3%), gas and other household fuels (+6.0%), pharmaceutical products (+5.6%), vegetables (+3.7%) and medical and hospital services (+1.5%).
• The most significant offsetting price falls this quarter are international holiday travel and accommodation (-2.4%), audio, visual, and computing media and services (-6.1%), and furniture (-2.8%).