{"id":23672,"date":"2023-04-26T02:33:41","date_gmt":"2023-04-26T02:33:41","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/australia-inflation-eases-in\/"},"modified":"2023-04-26T02:41:16","modified_gmt":"2023-04-26T02:41:16","slug":"australia-inflation-slows-in","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/australia-inflation-slows-in\/","title":{"rendered":"Australia inflation slows in Q1, market leans against rate hike"},"content":{"rendered":"<p>By Wayne Cole<\/p>\n<p>SYDNEY (Reuters) -Australian inflation eased from 33-year highs in the first  quarter as the cost of living saw the smallest rise in more than a year, while core inflation dipped below forecasts suggesting less pressure for another hike in interest rates.<\/p>\n<p>Investors reacted by lengthening the odds on the Reserve Bank of Australia (RBA) resuming raising rates at its May 2 meeting, having paused in April after a 10-hike streak.<\/p>\n<p>Futures now imply only a 9% chance of a quarter-point rise in the 3.6% cash rate, while the local dollar shed early gains to stand at $0.6620.<\/p>\n<p>The market had already moved that way overnight after a regional U.S. bank reported a huge outflow of deposits, suggesting global financial strains were not yet over.<\/p>\n<p>Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) rose 1.4% in the March quarter, just above market forecasts of 1.3% but the smallest increase since late 2021.<\/p>\n<p>The annual pace slowed to 7.0%, from 7.8%, suggesting inflation had finally peaked after two years of rapid acceleration in costs. For March alone, the CPI rose 6.3% on the year, down from 6.8% in February.<\/p>\n<p>Crucially a closely watched measure of core inflation, the trimmed mean, rose 1.2% in the March quarter, nudging the annual pace down to 6.6% and under forecasts of 6.7%.<\/p>\n<p>Still, core inflation remains far above the RBA&#8217;s target band of 2-3% and policy makers have been worried it could fuel a price wage spiral absent further tightening.<\/p>\n<p>Details of the inflation report showed hefty increases for health services, education, gas and domestic holiday travel and accommodation. Costs fell for clothing and household goods, a sign the global pulse in goods prices was clearly easing.<\/p>\n<p>As a result, the CPI for tradable prices that are mainly set by world trends rose just 0.3% in the March quarter, while prices for non-tradables that are mainly domestic services climbed a steep 1.9%.<\/p>\n<p>That divergence could make for a very close call on rates when the RBA meets next week.<\/p>\n<p>&#8220;Headline inflation has peaked, and weaker tradables inflation will contribute to slower inflation over the rest of 2023,&#8221; said Sean Langcake, head of macroeconomic forecasting for BIS Oxford Economics.<\/p>\n<p>&#8220;But we think there is enough momentum in core and services inflation to warrant tighter policy settings, and maintain our expectation for another rate hike in May.&#8221;<\/p>\n<p> (Reporting by Wayne Cole; Editing by Shri Navaratnam and Sam Holmes)<\/p>\n<p><a href=\"http:\/\/lynettelockhart.com\/client\/australia-inflation-slows-in\/file-photo-the-sydney-opera-house-and-city-centre-skyline\/\"><img decoding=\"async\" src=\"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3P01S-VIEWIMAGE.jpg\" alt=\"tagreuters.com2023binary_LYNXMPEJ3P01S-VIEWIMAGE\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Wayne Cole SYDNEY (Reuters) -Australian inflation eased from 33-year highs in the first quarter as the cost of living saw the smallest rise in more than a year, while core inflation dipped below forecasts suggesting less pressure for another hike in interest rates. Investors reacted by lengthening the odds on the Reserve Bank of [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":23690,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1216],"tags":[1223],"class_list":["post-23672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-economy","tag-updated"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3P01S-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/23672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=23672"}],"version-history":[{"count":4,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/23672\/revisions"}],"predecessor-version":[{"id":23717,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/23672\/revisions\/23717"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/23690"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=23672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=23672"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=23672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}