Australia’s Q1 CPI is consistent with the RBA's profile - ANZ

Analysts at ANZ Bank are out with their responses on the latest Australian CPI report released earlier today.

Key Highlights:

Q1 CPI data provides confirmation that inflation has stabilised and is creeping toward the policy target band

Headline CPI is now above 2% y/y, but core inflation remains softer.

The average of the two core measures rose 0.4% q/q - in line with the previous two quarters -but the ANZ diffusion index continues to point to soft price pressure across a broad range of items.

The data is consistent with the RBA's profile and, as such, has no policy implications

While the Q1 data suggest that core inflationary pressures have stabilised (it is the third consecutive 0.4% quarterly outcome), the underlying price pulse remains weak. The ANZ Diffusion index remains low, with just 34% of the basket rising by more than 2.5% annualised in Q1