24 Jul 2013
Australian CPI low, RBA cut in Aug a real possibility
FXstreet.com (Barcelona) - Australia's Consumer Price Index (QoQ) (Q2) came at 0.4% vs 0.5% exp and 0.4% prior. The RBA trimmed mean CPI (QoQ) (Q2) printed 0.5% vs 0.5% exp and 0.3% last. On a yearly basis, the CPI stood at 2.4% vs 2.5% exp and 2.5% prior. The RBA trimmed mean CPI (YoY) (Q2) came at 2.2% vs 2.2% exp and 2.2% last
The soft outcome of this release was key to help determine the next monetary move by the RBA, and judging by the numbers, looks like the perception of a cut in rates at the August meeting happening has slightly increased. Before the event, chances of a cut by the RBA in August were priced at 65%.
As noted by NAB Economists, "A result of 0.4% or lower and the RBA would almost be compelled to cut in August. 0.5% or 0.6% are ambiguous." Meanwhile, Westpac's Sean Callow said: ""A core reading of 0.4% or lower should see a slight increase in pricing for an Aug RBA cut, but at 63%, there is already plenty priced in."
The soft outcome of this release was key to help determine the next monetary move by the RBA, and judging by the numbers, looks like the perception of a cut in rates at the August meeting happening has slightly increased. Before the event, chances of a cut by the RBA in August were priced at 65%.
As noted by NAB Economists, "A result of 0.4% or lower and the RBA would almost be compelled to cut in August. 0.5% or 0.6% are ambiguous." Meanwhile, Westpac's Sean Callow said: ""A core reading of 0.4% or lower should see a slight increase in pricing for an Aug RBA cut, but at 63%, there is already plenty priced in."