Australia: Q2 CPI significantly weaker than expected - Rabobank

Michael Every, Senior Asia-Pacific Strategist a Rabobank notes that the Australian Q2 CPI was significantly weaker than expected on a headline basis at 0.2% q-o-q (vs. 0.4% consensus) and just 1.9% y-o-y vs. 2.2%.

Key Quotes

“That makes the RBA’s recent inexplicable chatter about “3.5% neutral rates” seems all the more ridiculous, even if trimmed mean and weighted median CPI both came in at 0.5% q-o-q as expected. Indeed, the latter two core measures at 1.8% y-o-y are both below the bottom of the RBA’s 2-3% CPI band. In short, Australia has no inflation problem, and no wage inflation despite gazillions of new jobs being created (allegedly). It just has house prices as silly as its jobs data.”