Australian monthly CPI (January 2025) 2.5% y/y (vs. 2.6% expected)

January 2025 monthly inflation CPI data from Australia

Comes in at 2.5 % y/y

• expected 2.6%, prior 2.5%

Trimmed mean 2.8% y/y

• prior: 2.7%

That headline result is encouraging. Its under the median estimate and the same as the previous month. Its also bang in the centre of the Reserve Bank of Australia’s 2 – 3 % target band. The RBA and government have an agreement to target the midpoint, so all good on that score.

The niggle, of course, is that underlying measure, core, which in Australia is the trimmed mean. Its registered an uptick. Its still under 3%, so that’s a positive.

Of course, I don’t know how many times I say this, the monthly figure doesn’t carry the weight of the official quarterly figure. For that we’ll have to wait until later in April. Still, January is what we have to go on and its net encouraging.

Now, despite all my blah, blah, blah, AUD/USD is barely changed – Circa 0.6351. And, this result today deosn;lt shift the RBA from being on hold at its net meeting – they’ll likely be awaiting the q/q numbers in April too.

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The monthly CPI data from Australia does not show all components of the CPI, that’ll have to wait for the quarterly data release (late in April).

• The monthly CPI indicator does, however, provide a timelier indication of inflation using the same data collected for use in the quarterly CPI. The monthly reading includes updated prices for between 62 and 73 per cent of the weight of the quarterly CPI basket, its not the full picture.

This article was written by Eamonn Sheridan at www.forexlive.com.