Australia: CPI off the floor and on track for the RBA – TDS

The research team at TDS notes that Australia’s Q1 core CPI rose by +0.43%/qtr and +1.76%/yr, a hair weaker than expected (mkt 1.8%, TD 1.89%) but entirely consistent with the RBA’s target of 2%/yr by mid-year.

Key Quotes

“The markets saw a soft report with headline at +0.5%/qtr and weighted median at +0.4%/qtr, both being a pip weaker than expected. The AUD sunk to $US0.751 and 3yr bond yields eased from 1.86% to 1.84%.”

“As inflation is well off its lows—and the RBA is the most upbeat on the global economy as its been in years—we expect cash rates to follow in due course.”