Dollar crushed as deflation arrives

From the ABS:

MARCH KEY FIGURES

Mar Qtr 2015 to Mar Qtr 2016

Weighted average of eight capital cities		% change	% change
All groups CPI		-0.2	1.3
Food and non-alcoholic beverages		-0.2	0.0
Alcohol and tobacco		0.9	6.1
Clothing and footwear		-2.6	-0.8
Housing		0.3	1.7
Furnishings, household equipment and services		-0.4	2.0
Health		1.9	4.6
Transport		-2.5	-0.5
Communication		-1.5	-6.4
Recreation and culture		-1.0	0.1
Education		3.1	3.3
Insurance and financial services		0.6	2.3
CPI analytical series
	All groups CPI, seasonally adjusted	-0.1	1.3
	Trimmed mean	0.2	1.7
	Weighted median	0.1	1.4

THE ALL GROUPS CPI

• fell 0.2% this quarter, compared with a rise of 0.4% last quarter.
• rose 1.3% over the twelve months to the March quarter 2016, compared with a rise of 1.7% over the twelve months to the December quarter 2015.

OVERVIEW OF CPI MOVEMENTS

• The most significant price falls this quarter are automotive fuel (-10.0%), fruit (-11.1%) and international holiday travel and accommodation (-2.0%).
• The most significant offsetting price rises this quarter are secondary education (+4.6%), medical and hospital services (+1.6%) and pharmaceutical products (+4.8%).

1.3% versus 1.7% expected. Oil the big one but weak everywhere. Dollar pole-axed:

As bond yields are crunched:

What were markets thinking?