**As seen in Risk In The Week report 10/20/23, subscribe at cablefxm.co.uk/reports
Australia Q2 consumer prices eased to 0.8% Q/q from the prior 1.4%, the figure missed the median survey of 1.0%. On a yearly basis, prices decelerated to 6.0% from 7.0%, the slowest reading since 1Q 2022. Trimmed mean inflation saw the rate dip to 0.9% Q/q from 1.2%, this surprised economists’ expectations of 1.1%. More recently, August monthly inflation metrics saw a rebound from July, the headline rose to 5.2% Y/y from the prior 4.9%. However, the pace remains below the monthly rates seen during the second quarter. The monthly core measure saw uninterrupted progress through August, inflation excluding volatile items rose 5.3% Y/y, the metric is now at the lowest level since May 2022 and compares to readings of around 8.0% at the beginning of the year. The desk at Westpac has warned about the monthly ABS CPI measure and said that their preferred gauge of inflation lies on the quarterly reading. Calculation techniques as well as the availability of price data were some of the reasons behind Westpac’s thinking. Separately, NAB’s Consumers Cost Of Living Index eased over 3Q after seven straight quarters of stress increments. NAB signaled that consumers have been able to adapt to costs and available employment, their survey shows that consumers expect the price of necessities to continue to rise over the coming year. The desk at NAB pencils both headline and trimmed inflation rising by 1.1% in 3Q, this is in line with the consensus. NAB warned that if their expectation is matched, this would be an upside surprise to the RBA’s trimmed inflation forecast from August, they added that such an outcome could push the central bank to revise its inflation forecasts higher.
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