Australia: Q4 CPI surged less than expected at 0.5% q-o-q - Rabobank

Michael Every, Head of FMR at Rabobank, notes that the Australia’s Q4 CPI rose less than expected at 0.5% q-o-q (0.7% consensus) and just 1.5% y-o-y (1.6% consensus).

Key Quotes

“Moreover, on a trimmed mean basis, CPI was up 0.4% q-o-q, the same as in Q3, and on a weighted median, the same. In short, there is not real inflation out there – except in the silly prices being paid at housing auctions. With wage growth slipping down to meet that low inflation level, Australia is still deep into the new normal, with only a property bubble and hopes of China continuing to go where no man has gone before provide its own bubbly stimulus keeping everything on an even keel. I think the RBA Governor may want to organize a group screening of La La Land forthwith to calm the nerves.”