It is anticipated that Australia’s July Consumer Price Index (CPI) will decline from the previous month’s 5.4% to 5.2%. These recently introduced monthly inflation indicators are crucial for the policy control of the Reserve Bank of Australia, which previously relied on quarterly data releases.
For this month, West Pacific Bank highlights that the key risk lies in the electricity sector, with the timing of both national energy subsidies and increases in electricity bills potentially having an impact.
Previously, RBA Chair Lowe emphasized that bringing inflation back to target levels is their primary task, while also warning that the central bank might need to further tighten monetary policy.
However, the current market expectation suggests a probability of around 90% that the Reserve Bank of Australia will maintain the interest rate at 4.1%.
