Thursday, October 26

Australia: higher CPI, higher chance of rate hike

For those who own Aussie dollars and investments:

The Australia CPI data released today surprised on the upside by rising 0.9% quarter-on-quarter vs consensus of 0.8%. The biggest contribution to inflation is food (2.3% q/q), while housing cost also increased due to higher housing rates and housing price. The housing market in Sydney and Melbourne is easing but the rest of the country is still up, up and up.

Looks like another rate hike is coming. The market is currently priced in a 90% chance of 25bp rate hike in November.

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