FLAU - Australia: May Inflation Raises The Spectre Of Rate Hikes

2024-06-26 05:20:00 ET

Summary

• Everything now hangs on the June inflation print, just days before the Reserve Bank of Australia’s 6 August rate meeting.
• We need to see inflation dropping then, or we may be facing another rate hike.
• Short-term interest rate markets are at least beginning to price in just over a 50% chance of a hike by September, which seems sensible.

By Robert Carnell

5 months in which inflation has gone nowhere except backwards

Until December 2023, Australia had made decent progress on inflation, with the December print of 3.4% YoY, well down from the peak of 8.4% in December 2022....

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