Australia’s July CPI will be released tomorrow (Wednesday).
About 57% of the CPI basket by weight is price updated in July, with only a few services categories measured.
The relative low representation of the CPI basket in the first month of the quarter means that this release is unlikely to garner too much attention inside the Bank. That said, we’d suggest that housing components of the CPI will be the first sub-components the RBA’s inflation analysts will quickly scroll to.
We expect year-ended headline inflation to have picked up from +1.9% y/y in June to around +2.2% y/y in July.
