The July Monthly Indicator rose just 4.9%yr (0.3%mth) softer than market expectations but was clost to our 4.8%yr (0.2%mth) forecast. As it is close to our forecast it is unlikely to see us meaningfully revise our Q3 CPI forecast of 1.0%qtr.
The Monthly CPI Indicator printed 0.3%mth/4.9%yr, very close to Westpac’s 0.2%mth/4.8%yr forecast but quite a bit softer than the market’s 5.2%yr forecast.
As expected, electricity presented a key upside risk printing 6.0%mth vs 2.4%mth forecast. Also on the upside was gas & other fuels (2.3%mth vs 0.8%mth forecast), auto fuel (–0.2%mth vs –1.0% forecast), clothing & footwear (2.5%mth vs -0.3% forecast) and dwelling purchases (0.7%mth vs 0.3%mth forecast). All up housing surprised to the upside at 1.3%mth vs 0.7%mth forecast.
Offsetting was falling prices for food (–0.2% vs flat forecast), recreation (–1.5%mth vs –1.0% forecast).
We will process the numbers in more detail and will make any revisions that are necessary, with note to the stronger than expect housing costs but weaker household contents & services. Overall, with a headline print so close to our forecast we doubt any revisions will be significant.
As such it is also consistent with out view that there is no near term pressure for the RBA to increase rates again.
