Australia’s May CPI will be released next Wednesday, 24 June.
While headline inflation in April was below expectations, trimmed mean inflation remained relatively strong at +0.31% m/m and +3.4% y/y.
We will take a keen interest in the housing components of inflation in May, particularly with signs that new dwelling purchase inflation was picking up pre-conflict and evidence of strong construction material price hikes since the conflict started.
The May CPI will allow us to gauge with some confidence whether underlying inflation in Q2 is likely to have been as strong as the RBA expects. The Bank’s nowcast in the May SMP for Q2 trimmed mean inflation was higher than +0.9% q/q.
Key May CPI forecasts:
