...not as high as feared and AUD's fall below 65c suggest no RBA rate hike expected.
Annual inflation shoots up in Q2 at 3.8pc; inline with forecast
Sarah Jones
The number: The consumer price index was steady at 1 per cent in the three months through June from a 1 per cent in the March quarter, according to the Australian Bureau of Statistics.
Over 12 months, CPI rose to 3.8 per cent from 3.6 per cent. Market consensus was for headline inflation to remain at 1 per cent for the quarter, and pick up to 3.8 per cent year-on-year.
Why it matters: This is the last key piece of economic data that will inform the Reserve Bank’s decision on monetary policy when it meets next week. A cohort of economists predicts that the RBA will need to hike at least once more this cycle to tame sticky inflation.
What has changed: Markets are pricing a roughly 20 per cent chance that the RBA will raise interest rates next week, making the central bank an outlier among the world’s central banks.
What next: The US Federal Reserve announces its decision on monetary policy later on Wednesday (Thursday AEST) and the RBA is due to meet next week on August 5 and 6.
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