Key points from Westpac Bank in its CPI preview, which said: “June CPI should not close the door on interest rate cuts”:
- Westpac Bank confirmed its June quarter CPI forecast of 1.0% q/3.8% y/y which we first issued on June 18 and left unchanged in our July 2 update.
- Our median growth forecast also remained unchanged at 0.9% QoQ/4.0% YoY.
- For June, we expect a 0.3% increase on the month, which would mean the annual pace slowing from 4.0% y/y in May to 3.5% y/y in June (we had 3.6% y/y in early July). June will provide an important update on some services, including: property taxes and fees, water and sewer, child care, dental services, veterinary and other services for pets, and other financial services.
- As our chief economist Lucy Ellis recently said, “We are not that special,” and Australia is unlikely to move in the opposite direction to global deflationary forces.
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June and quarterly CPI data from Australia is due on July 31.
The Reserve Bank of Australia is scheduled to meet the following week, on August 5-6.
This article was written by Eamonn Sheridan on www.forexlive.com.
