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Australia’s Q2 CPI inflation all but confirms an RBA rate cut in August.
Trimmed mean inflation of +0.6% q/q was in line with the RBA’s May SMP forecast despite expectations - including from the Bank - that it would print a bit higher. Kudos to the Bank’s desk analysts…
1. Australia’s Q2 headline CPI inflation of +0.7% q/q and +2.1% y/y was 0.1ppts below our/consensus expectations (+0.8% q/q, +2.2% y/y).
The seasonally adjusted CPI rose +0.6% q/q, a touch softer than our nowcast (+0.7% q/q).
Softer-than-expected holiday travel and government-administered price inflation - mainly health and utilities - accounted for most of our 0.1ppt forecast error for headline inflation. This was largely because information contained in the monthly CPI indicator for the month of June printed below our estimates.
2. Trimmed mean CPI inflation was +0.59% q/q and +2.7% y/y.
This was nearly 0.1ppts below consensus/our expectations on a quarterly basis but in line with expectations on a year-ended basis.
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