April to June CPI data due from Australia this week, scheduled for 0130GMT on Wednesday 26 July 2017

This will be watched by the currency market - higher inflation would be supportive of the AUD, and vice versa. But, for previews, here are a couple from banks (in brief) and I'll have more as we approach the release date and time:

ANZ:

  • We expect the Q2 CPI print to confirm that inflationary pressures have stabilised, although we continue to see only a very gradual lift from here.
  • Indeed, on our forecasts, core inflation is set to remain below 2% until late 2018.
  • From a policy perspective, the modest inflation profile is being countered by concerns around the housing market and financial imbalances. Against this backdrop, we continue to see the RBA on hold for the foreseeable future.

ANZ noting that while inflation is subdued and is not expected to be a big influence on any RBA rate hike considerations (note - the RBA is not considering any near term hikes) RBA concerns on high house prices, consequent high leverage and its impact on consumption and risks to financial 'imbalances' that are more of a question for the RBA.

Westpac:

  • forecast for the headline CPI is 0.6%qtr lifting the annual pace to 2.4%yr from 2.3%yr.
  • June is seasonally a softer quarter with the ABS seasonal factors boosting our seasonally adjusted estimate to 0.8%qtr.
  • Core inflation is forecast to print 0.5%qtr (0.54% at two decimal places) holding the annual rate flat at 1.8%yr. The trimmed mean is forecast to rise 0.51% while the weighted median forecast is 0.57%. The two-quarter annualised pace of core inflation will lift slightly to 1.9%yr from 1.8%yr still holding below the bottom of the RBA's target band; the two quarter pace has been below the band since June 2015.
  • Traded prices are forecast to rise 0.9%qtr/-1.2%yr
  • Non-traded prices are forecast to rise 0.5% in Q2
  • There is a lot of interest in the impact of rising electricity prices in the September quarter CPI. For some guidance, we have a preliminary estimate for the Q3 CPI. Incorporating a 16%qtr rise in electricity prices we are forecasting a 0.7%qtr rise in headline inflation but a modest 0.3%qtr rise in core inflation.