Australia’s inflation cools to 3.5% but core gauge holds at 3.6%, muddying RBA rate outlook
AI Market Summary
Australia's headline CPI eased to 3.5% y/y, but the RBA's preferred trimmed mean held at 3.6%, reinforcing concerns that underlying inflation is entrenched. Meeting minutes show the board debated a pre-emptive hike, keeping the path for further tightening open despite a softer labour market. The news shifts near-term focus to higher-for-longer policy risk, supporting AUD and weighing on rate-sensitive assets.
Impact level
● Medium
Affected assets
NCFXAUD2USD/USDT+0.22%
AI Insight · NCFXAUD2USD/USDTAI Insight
▼ Bearish
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Australia’s September inflation data showed headline CPI eased from 3.8% to 3.5%, but the RBA-watched trimmed mean inflation held at 3.6%, above the 2%-3% target band. Housing and food prices were the main contributors. The Reserve Bank of Australia kept the cash rate unchanged at 4.35% this month, but Governor Michele Bullock said another hike later this year remains possible.
