Australia CPI preview – CBA expect “Headline inflation in August back within RBA’s target”

A preview of the August CPI data due from Australia on September 25 from Commonwealth Bank of Australia.

• We expect the monthly CPI indicator to show inflation eased to 2.7%/yr in August, within the RBA’s headline inflation target.
• A large 16% /mth fall in electricity prices is the key expected driver. But disinflation in other CPI categories, amid a spending contraction and softer wages growth, as well as base effects from a year ago play a large role.
• Such an outcome would be in line with timely survey measures that look constructive for Q3 24 inflation.

CBA adds that the lower inflation result they expect for the month corroborates “the evidence for disinflation seen in the various monthly price surveys in August”. And that “a range of private surveys suggest the inflationary pulse has stepped down so far in Q3 24 as weak consumer demand and the ongoing gradual loosening in the labour market assists the disinflationary process … the combined signal from these surveys is very promising”

CBA graph:

—

The inflation data is due from Australia on Wendesday 25 September at 11.30 am Sydney time

• 0130 GMT, 2130 US Eastern time

Earlier:

• Australian August Monthly CPI preview – Westpac expect 2.7% y/y for the monthly read

As I also noted earlier:

• The quarterly CPI is not due until October 30. It’s the quarterly CPI that will be of most focus for the RBA. The monthly inflation data is not the ‘official’ rate, and its not as complete as the quarterly data.

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