Quicknote: Aussie monthly inflation slips back, indicating potential peak
The October Aussie monthly CPI trimmed mean is the number we pay the most attention to, particularly compared to the prior corresponding period. It was up 5.3% which was below expectations.
The numbers can move around a fair bit from month to month, so we can’t read too much into this one in isolation. Fruit and veg surprised on the downside, will that reserve in November because of the weather? It's too hard to say.
What we can say however is that it wasn’t a blowout of any sorts and in the overall context of the current environment, that in itself is a positive. We’re in a hyper sensitive market that is trying to figure out what happens in 2023.
Bottom line: With that in mind, we’re sticking to our base case being that the RBA will move by another two 25 bpts rises before it pauses next year and waits to see what materialises, not just here domestically, but also with our largest trading regional partner China.
A Chinese re-opening and flow on impacts on commodity prices and a higher Aussie dollar could ease some imported inflation pressure and change the outlook proposition facing the RBA.