CPI previews

Find below a couple of CPI previews from the major banks. Both ANZ and NAB see a subdued CPI print as likely but differ on the implications. ANZ predictd a cut, NAB does not.

Strategy Around the Q3 CPI Release[1]

CPI Preview Sept 2011

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

  1. Amazing! Over the last 30 years the single most important factor in achieving a low inflation environment has been the emergence of China as a source of cheaper manufactured goods to the world.

    Yet we continue to read comments about inflation into the future without a single mention of ‘China’

    • Flawse, just as real estate only ever goes up, so too do imported finished goods from China only ever go down…that’s right isn’t it? I read it somewhere in a newspaper once so it surely must be true.

      Although let’s face it, when imported good start to rise in price again, they’ll once again fiddle with the CPI basket to exclude or under-weight anything that might some political discomfort. Still that might be a little difficult – the CPI is already so close to achieving a total divorce from reality that we’ll soon have to start calling it a currency.

  2. I can’t see a rate reduction yet. The RBA is far more sensitive to the unemployment figure than they are to GDP, CPI, retail spending or house prices.

    Unfortunately, I would suspect that with the savings culture firmly in play at present, this will still not be enough to defibrillate the big bank’s loan books to the extent they would like to see. It may well be a deep cut, and quite early, in order to achieve the same as a small cut did last time.