Inflation Outlook Brightens as Australia Braces for Key CPI Update

0

Following a decrease in annual inflation to 4.1% from a previous rate of 5.4%, optimism is in the air about reinforcing the disinflation trend witnessed in the latter half of the prior year. The drop to a 0.6% quarterly increase has been heralded as the smallest rise since early 2021, igniting hopes for continuous improvement.

While the RBA has not tweaked rates since their last adjustment in November, market participants are speculating that the upcoming steps will involve easing. However, projections for these reductions remain hazy and are presumed to be on the RBA's agenda later rather than sooner.

On the horizon is the upcoming CPI update on Wednesday, critical for the RBA's assessment of achieving their inflation goal of two to three percent. Both the RBA and banking economists envisage that this endeavor to rein in inflation might require continued slow and steady effort. Despite the arduous journey ahead, the projection sees mid-year inflation slowing to 3.3%, aiming to realign with the target at 2.8% by the close of 2025.

Economists from top Australian banking institutions predict a modest rise in March's CPI. Predictions range from 0.7% from National Australia Bank and Commonwealth Bank to a slightly higher 0.8% foreseen by ANZ and Westpac. This uptick is juxtaposed against an abnormally high 1.4% increase recorded in the previous March, leading to a potential dim in annual inflation rates.

Analysts from the Commonwealth Bank of Australia (CBA) have presented a reserved chalk-up for the headline CPI at 3.4%, slightly beneath current RBA projections. CBA's assessment is backed by signs of tempering price pressures apparent in recent business and industry surveys. Nevertheless, items like rents and education could witness substantial inflation, with healthcare poised as a potential wildcard for price acceleration.

Stepping back a few days from those paramount releases, the economic agenda includes the presentation of "flash" purchasing managers' surveys in April. Following the Anzac Day holiday, the ABS will also disseminate producer price and export-import indexes which will send corresponding ripples across the markets.

Market winds are also responding to the longest continuous decline experienced by American indices since fall of 2022. With this backdrop of six consecutive skids for the S&P 500 and Nasdaq, investors wrestle with an ambivalent earnings landscape and burgeoning international tensions. Thus, while the larger S&P 500 and Nasdaq experienced declines, Australian share futures saw a slight uplift, paired with mixed performances within local benchmarks.

Published:Monday, 22nd Apr 2024
Source: Paige Estritori

Share this news item:

Finance News

Market Resilience Amid Strong Quarterly Inflation Data 30 Apr 2024: .Paige Estritori Following an initial surge, the Australian equities wavered into a close call as the market absorbed the recent inflation trends. Trading remained virtually unchanged with the S&P index dropping a nominal 0.5 points to settle at 7683, and the All Ordinaries dipping gently by 0.4 points, ending the day at 7937.5. - read more

Rates on the Rise: Market Jitters Lead to ASX Plunge 29 Apr 2024: .Paige Estritori Significant market movements underscore the growing concerns over a possible interest rate hike by the Reserve Bank of Australia, resulting in a marked drop in the nation’s share market. The S&P/ASX200 index faced a jarring fall, dropping 1.4 per cent which translates into a 107.1 point retreat, ending the session at 7575.9—a notable slump affecting a broad range of sectors. - read more

Tax Tension: Australians Grapple with Surging Income Levies as Inflation Undermines Earnings 26 Apr 2024: .Paige Estritori Amidst soaring living expenses and aggressive interest rate increases to quell inflation, Australians face an additional financial burden as income tax impositions outpace those in other affluent nations. This echelon of fiscal pressure is compounded by the unfortunate fact that their earnings are making a retreat in real value terms. - read more

Avoid Hefty Fines: Key ATO Dates to Remember 23 Apr 2024: .Paige Estritori Australians are being cautioned about the possibility of incurring a $313 penalty if they fail to observe two critical Australian Taxation Office (ATO) deadlines looming ahead. As tax season approaches, individuals must take note of these important dates to avoid fines. - read more

Inflation Outlook Brightens as Australia Braces for Key CPI Update 22 Apr 2024: .Paige Estritori A crucial announcement regarding consumer prices is forthcoming as the Reserve Bank of Australia (RBA) anxiously waits to steer its future monetary policy decisions. Analysts and economy watchers alike have their eyes locked onto the publication of first-quarter consumer price index (CPI) data from the Australian Bureau of Statistics, set to impact the nation's economic direction. - read more

Alarming Rise in Australian Student Loans Calls for Immediate Action 19 Apr 2024: .Paige Estritori A fresh analysis has sparked concern over the surging levels of student debt in Australia, invigorating discussions for policy revisions in the impending national budget. Projections denote that during the initial tenure of the incumbent Labor administration, the cumulative student debt may swell by an extraordinary $12.3 billion, marking a 16% escalation. This upward trend raises alarms for prospective and current students grappling with the financial barriers of higher education, and ignites a dialogue on the urgency of governmental intervention. - read more

ANZ Bank Bids Farewell to Cheque Books Amid Digital Shift 19 Apr 2024: .Paige Estritori The fintech landscape continues its relentless advance as ANZ, one of the leading banks in Australia, has declared a pivotal shift in its operations that will see the discontinuation of cheque book issuance. This calculated move aligns with broader trends in digital banking and paves the way for modern financial interactions among its clientele. - read more