Australia CPI Preview: CPI seen declining in Q4 on low fuel price

By FXStreet FXStreet (Mumbai) – Australia will release the Q4 Consumer Price Index (CPI) data on Wednesday at 00.30 GMT. CPI is expected to have fallen 0.3 per cent quarter on quarter in Q4, down from 0.5 per cent rise in inflation seen in the earlier quarter. Year on year, CPI can be expected to have risen slightly to 1.6 per cent in Q4 compared to 1.5 per cent increase seen previously.

According to Westpac, the December quarter has seen subdued prices. Segments such as holiday travel (domestic & international), tobacco (residual due to timing of the September re-indexing of the excise) and house purchases helped to boost prices and contributed significantly to the overall CPI. However, the impact was offset by declining fuel prices which subtracted 0.2 ppts from headline CPI. Westpac expects core inflation to increase by 0.6% in the December quarter, pushing the annual core CPI to the lower bottom of RBA’s inflation target band. The six month annualized inflation is likely to grow at a slower 1¾ per cent pace.

Besides re-indexing of tobacco excise, rise in holiday travel costs and consistent gains in the housing sector there is little inflation push from other segments. This has led Westpac project …read more

Source:: FX Street