Australia publishes August CPI on Wednesday at 01:30 GMT, a day after the RBA raised its cash rate by 25 basis points. Headline inflation is forecast to accelerate to 4.0% y/y while the trimmed mean gauge is seen holding at 3.6%, a split that will shape how far traders think the RBA still has to go.
Headline inflation seen jumping to 4.0%
Australia's August CPI print, due at 01:30 GMT on Wednesday, lands a day after the RBA lifted its cash rate. Headline inflation is forecast at 4.0% y/y, up from 3.5%. The monthly reading is expected at 0.4%, slower than the prior 1.0%. That gap suggests the annual jump owes something to base effects rather than a fresh burst of price pressure, though the forecasts alone cannot confirm that.
Trimmed mean holds the RBA's attention
Policymakers watch the trimmed mean measure most closely because it strips out extreme price swings. It is forecast to hold at 3.6% y/y, unchanged from the prior reading, with the monthly rate seen at 0.3% against 0.5% before. A result in line with that would point to underlying inflation staying elevated rather than accelerating.
AUD/USD is the most direct read-through
The Australian dollar is the most direct read-through from the release. A print at or above forecast, especially in trimmed mean, would strengthen the case for further tightening and could support the currency and short-dated yields. A softer outcome, particularly in trimmed mean, would invite doubts about how far the RBA's rate hikes need to go, and a headline beat alongside a trimmed mean miss would send mixed signals to the market.
Because the RBA has already moved this week, the data now shapes expectations for its next decision rather than the last one. Investors will next watch the RBA's communication and subsequent data releases to judge whether Tuesday's hike marks the start of a sequence or a single adjustment.
Source: Investinglive
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