Aussie October Monthly CPI Preview

Australia’s October monthly CPI will be released on Wednesday. We expect little change in key year-ended measures of inflation.

Year-ended headline inflation is expected to have been +2.2% y/y in October, similar to the +2.1% y/y outcome for September. This is based on our expectation for a small fall of 0.3% m/m for the non-seasonally adjusted headline CPI.

Monthly volatility in holiday travel & accommodation prices and lower petrol, rents and electricity prices are expected to account for a large share of the monthly decline in the headline CPI.

This week’s monthly CPI may be less consequential for markets than usual given the latest RBA Board Minutes noted that the Board “would need to observe more than one good quarterly inflation outcome to be confident that…” a decline in inflation was sustainable. A big ‘miss’ would be needed to upset the apple cart.