Following last week’s lower-than-expected Q2 trimmed mean CPI inflation reading, Monday’s Melbourne Institute’s (MI) monthly inflation gauge for July confirmed a lower inflationary pulse.
As shown in the next chart from Justin Fabo at Antipodean Macro, the “monthly inflation gauge for Australia was sitting below official quarterly inflation readings in July on both a headline and trimmed mean basis”:
The annual MI trimmed mean inflation gauge also declined further in July to below 3%:
Therefore, the main inflationary concern for the RBA is producer prices, which accelerated in the June quarter, according to Friday’s ABS release:
Later this afternoon, the RBA will announce its monetary policy decision, with almost all economists and financial markets tipping that rates will remain on hold ahead of cuts late this year or early next year.
