NAB:
#AUD: February CPI rose 3.7% yoy (NAB 3.8% and consensus 3.8%)
Monthly trimmed mean was 0.2% mom and 3.3% yoy, (
#NAB and Consensus 3.4%)
The data suggest that underlying inflation was on track to come in marginally cooler than the
#RBA feared in their February SoMP before the Iran shock... Today’s data and the rise in the unemployment data last week will soften some of the
#RBA’s concerns about the extent of capacity and inflation pressure in the economy before the shock, but only at the margin. The broader assessment that the labour market remains a little tighter than is consistent with full employment and inflation was on track to moderate only gradually back towards target remains intact. Given that starting point, the
#RBA is likely to have more tolerance for a slowdown in growth and some cooling in the labour market than a more protracted miss on inflation.
#NAB continues to see the RBA raising interest rates to 4.35% in May.