Macro
Australian inflation climbs to 4.3% in September as core prices outrun the RBA's forecast before its November 3 decision
Underlying inflation rose 1.0% in the September quarter against the central bank's 0.8% forecast, with fuel and electricity leading the increase.
HedgeWeekly News Desk ·
Australia's annual consumer price inflation quickened to 4.3% in September from 4.0% in August, the Australian Bureau of Statistics said on Wednesday, a bigger rise than economists had expected. Prices rose 0.8% over the month before seasonal adjustment, up from 0.4% in August.
The trimmed mean, the underlying gauge the Reserve Bank of Australia watches most closely, rose to 3.6% in the year to September from a revised 3.5%. Over the September quarter it increased 1.0%, above the RBA's 0.8% forecast, while headline prices rose 1.3% in the quarter.
Housing was the biggest contributor, with prices up 5.2% on the year and adding 1.14 percentage points to the annual rate. Electricity costs jumped 12.8% as Commonwealth rebates ended, and transport rose 8.7%, driven by automotive fuel, which was up 23.6% from a year earlier and 9.4% in September alone.
The data land days before the RBA board meets on November 2 and 3, when it will also publish new inflation forecasts. Markets priced better than a 60% chance of a November hike before the release, and the big banks were split: ANZ and Westpac expected a rise after September's increase, while CBA and NAB forecast a hold. Deputy Governor Andrew Hauser said last week the inflation outlook looked materially worse than the bank had projected, so a core overshoot driven partly by fuel puts the decision on whether to tighten again squarely in focus for Australian bond and currency positioning.