Australia’s inflation expectations increased in June although the rate slowed from the previous month, survey data from TD Securities and Melbourne Institute showed Monday.
The TD Securities -Melbourne Institute monthly inflation gauge rose 0.1 percent in June, after increasing 0.3 percent each in May and April.
In the twelve months to June, the inflation gauge increased 1.5 percent, following a 1.4 percent rise for the twelve months to May.
Leading the price gains was automotive fuel, which saw a 4.2 percent rise in prices followed by fruits and vegetables and new dwelling purchases. On the other hand, prices of furniture and furnishings and newspapers, books and stationery fell.
The trimmed mean of the Inflation Gauge rose 0.1 percent in June, following the 0.4 percent rise in May.
Prashant Newnaha, rates strategist at TD Securities said headline inflation is expected to increase by 0.7 percent in the quarter, rendering the annual rate at 1.6 percent, and underlying inflation to rise by 0.4 percent in the quarter for an annual rate of 2.2 percent.
“We remain of the view that the RBA is comfortable with a terminal cash rate of 2 percent. However, as we expect weak data reports in the weeks and months ahead, the next move is more likely to be down than up, a factor that will be supportive of the RBA’s call for a lower AUD,” said Newnaha.
The material has been provided by InstaForex Company – www.instaforex.com