Australian Q4 CPI: Quiet now, stronger later - TDS

Analysts at TDS note that the Australia’s underlying inflation rose by +0.4%/qtr and +1.55%/yr, a touch weaker than expected (TD expected a pop higher to 1.7%/yr) but bang in line with the RBA’s 1½%/yr target.

Key Quotes

“The markets reacted to the soft print: AUD sank from $US0.76 to $US0.754 and 3yr bond yields eased from 2.02% to 1.96%. The markets may be of the view that inflation has troughed, but will look elsewhere for trading themes over the next two weeks, ahead of the RBA meeting on 7 February.”