CBA:
There was really only one question to answer from today’s CPI numbers: Is inflation low enough to justify market pricing and economist’s expectations for an August rate cut? The answer is a qualified yes.
Inflation is low whichever way you cut the numbers. Headline inflation is running at the slowest pace since mid 1999. Underlying inflation is running at a record low. Inflation in the first half of 2016 ran at 1¼% (annualised) or well below the RBA’s 2‑3% target band.