The CPI from Australia, responses so far from Goldman Sachs and others as follows:
- More analyst responses to the Australian inflation data
- Goldman Sachs on the Australian CPI
- Q1 Australia headline inflation: 0.5% q/q (expected 0.6%)
More now, this time a great piece from ANZ, my summary and any bolding:
ANZ BOTTOM LINE
- Q1 CPI data provides confirmation that inflation has stabilised and is creeping toward the policy target band
- Headline CPI is now above 2% y/y, but core inflation remains softer.
- The average of the two core measures rose 0.4% q/q - in line with the previous two quarters -but the ANZ diffusion index continues to point to soft price pressure across a broad range of items.
- The data is consistent with the RBA's profile and, as such, has no policy implications
More:
- The strongest categories were fuel (+5.7%), new dwelling purchase prices (+1.0%), medical and hospital services (+1.6%) and electricity (+2.5%), while the ABS also noted that vegetable prices continue to be impacted by adverse weather.
- Partially offsetting this was a seasonal fall for international holiday & accommodation (-3.8%) as well as falls for fruits (-6.7%) and furniture (-3.5%).
- The strong rise in new dwelling purchase inflation is a surprise given the new methodology was expected to exert a downward bias.
- The average of the two core measures rose by 0.4% q/q - in line with our expectations -which lifted the annual rate to 1.8% y/y. The trimmed mean is running a little faster than the weighted median and in annual terms is now close to the bottom of the RBA's band. CPI ex volatiles also rose by 0.4% q/q.
- While the Q1 data suggest that core inflationary pressures have stabilised (it is the third consecutive 0.4% quarterly outcome), the underlying price pulse remains weak. The ANZ Diffusion index remains low, with just 34% of the basket rising by more than 2.5% annualised in Q1
- Tradable inflation remains weak, falling by 0.2% q/q in Q1, while non-tradable prices rose by 0.9%. Weak wage growth continues to impact, with market services inflation flat in Q1, and up just 0.7% y/y.