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The ASX200 began tracking upward from a flat 0.00% at 11.30am Sydney time as CPI data came in at 2.7% YoY for August.
The widely expected CPI decline was driven by electricity rebates from Canberra that pushed down the price of electricity on a temporary basis.
It follows the RBA keeping rates on hold on Tuesday at 4.35% with bank chief Michele Bullock confirming the board didn’t “explicitly” consider a rate rise.
With that said, housing inflation is set to remain an upside pressure, so it’s unlikely we’ll see a surprise RBA rate cut.
As for who can read the crystal ball; westpac were calling 2.7%, as were NAB; TD Securities for their part were anticipating 2.9%.
That electricity rebate is important to note in the context of today’s month-on-month CPI falling from 3.5% to 2.7% – a significant decline.
But without those rebates, we could be getting quite a different picture. Future CPI reads – especially the upcoming October quarterly read – will, perhaps, be more meaningful.
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