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Australia’s April CPI was a bit softer than we had expected but trimmed mean inflation remained uncomfortably strong and well above the inflation target.
1. Australia’s monthly CPI rose +0.35% m/m in April in original terms but fell 0.07% m/m after seasonal adjustment. This was a bit softer than our nowcasts.
Year-ended CPI inflation was +4.2% y/y, down from +4.6% y/y in March (Our nowcast was +4.4% y/y.)
As expected, lower fuel prices (-7.0% m/m) - largely because of government excise cuts - subtracted nearly 0.3ppts from monthly headline inflation. Free public transport in Victoria and Tasmania saw urban transport fares fall nearly 20% m/m and subtract 0.07ppts from monthly inflation (in line with our nowcast).
In contrast, the annual increase in private health insurance fees contributed to a +3.5% m/m rise in medical & hospital services prices in April. Holiday travel & accommodation prices rose +5.5% m/m - contributing 0.32ppts to monthly CPI inflation - which was less pronounced than we had pencilled in.
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