Australia inflation jumps to 6-mth high in May, ramps up rate hike risks
Adds calls from UBS and Deustche Bank for a rate hike in August, NAB delaying rate cuts to May 2025
By Stella Qiu and Wayne Cole
SYDNEY, June 26 (Reuters) -Australian consumer inflation accelerated to a six-month high in May, while a key measure of core prices rose for a fourth month, figures that caught traders off-guard and prompted markets to raise the chances of another interest rate hike this year.
The Australian dollar AUD=D3 climbed 0.5% to $0.6684 and the three-year bond futures YTTc1 tumbled 18 ticks to 95.93, their lowest level in three weeks.
Markets moved to imply a 60% chance of a quarter-point hike from the Reserve Bank of Australia by November, up from a non-existent probability before the data, with a move likely in August depending on the outcome of the full second-quarter CPI report.
Futures also priced out any chance of a cut in the 4.35% cash rate this year, with the prospects of a first easing delayed until late 2025. 0#RBAWATCH.
Data from the Australian Bureau of Statistics on Wednesday showed its monthly consumer price index (CPI) rose at an annual pace of 4.0% in May, up from 3.6% in April and well above market forecasts of 3.8%.
A closely watched measure of core inflation, the trimmed mean, climbed to an annual 4.4%, also its highest level in six months and up from 4.1%.
UBS and Deutsche Bank now see a rate hike in August while the National Australia Bank delayed the call for the first easing to May 2025, compared with November previously.
George Tharenou, chief economist at UBS, expects the second quarter CPI to come in at a quarterly rate of 1.1%, above the RBA's own forecasts.
"Our new CPI forecasts make a rate hike in August a 'close call'... However, we see enough evidence to change our base case view," said Tharenou, adding that there is also a risk of a follow-up hike most likely in November.
AUGUST HIKE?
With inflation still running above its target band of 2-3%, the RBA has warned it is alert to upside risks. It has held interest rates steady at a 12-year high of 4.35% for five straight meetings.
The central bank will have the luxury of waiting for the quarterly report due at the end of July to decide on its next policy move. But hot readings for April and May suggest the second quarter inflation data could be as strong or stronger than the first quarter report, putting pressure on the RBA to hike in August.
Analysts cited the often volatile travel costs as one reason for the above-forecast inflation figures in May, while there are encouraging signs that price gains in some services sectors are moderating.
When volatile items and holiday travel were excluded, the CPI dipped to 4.0%, from 4.1%.
The report showed electricity prices jumped by an annual rate of 6.5%, picking up from April's 4.2% rise, due to the unwinding of government rebates, although they are set to ease from the third quarter as new cost of living relief from the federal and state governments kicks in.
Rent surged 7.4% while insurance costs jumped 14%.
The May report, which provided an update on more services in the second quarter of the year, showed prices for haircuts, restaurant meals and takeaway food were up 5.5%, 4.2% and 4.3% annually.
"It is possible the Board will change course and raise rates at its August meeting but with the labour market easing we don’t believe their hand will be forced," said Alan Oster, chief economist at NAB.
"The mix of slow growth and gradual progress on inflation reflects the RBA’s decision to embrace a “lower for longer” approach – a lower rate peak compared to other advanced economies, resulting in a longer period at that peak."
Reporting by Stella Qiu and Wayne Cole; Editing by Edwina Gibbs and Shri Navaratnam
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
