TD Securities/Melbourne Institute (MI) Inflation Gauge for January was 0.1% month on moth and 1.5% year on year:
The TD trimmed mean measure is 0.3% month on month and 2.3% year on year.
Annette Beacher, Head of Asia-Pacific Research at TD Securities, who has been far too hawkish for two years and remains ludicrously so with rate hikes still her call later in the year reckons:
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- While early days, and masked by the fuel price slump, there could be a message in the jump in tradable audio-visual goods prices, with December discounting sharply reversed in January. Such trends bear close watching
- We expect the Board members to have a robust discussion about the impact of the lower Australian dollar and oil price slump on the outlook for domestic activity and prices, the unusual global central banks decisions in recent weeks, and the reasons behind heightened expectations for the Board to deliver a rate cut that day.
- We do not expect such a drastic shift in the RBA Board’s well-worn and transparent process, instead we favour an unchanged 2.5 per cent cash and a shift to an explicit easing bias to offer easier policy to support to demand should that prove to be necessary.
Watch out for that inflation bunyip. It’s always lurking around the corner!
