Brocker.Org: Australia’s Q1 2017 CPI preview – NAB


National Australian Bank (NAB) is out with a quick preview on the forthcoming Australian Q1 CPI report, scheduled for release tomorrow at 0130GMT.

Vital Points:

Fundamental inflation is probable to continue to be weak and underneath the RBA’s target band

Ongoing labour market softness will continue to keep wages inflation contained

Hire inflation will also be weak at a time of escalating dwelling offer

Even so, possible governing administration insurance policies to tackle dwelling price development could influence rental development going ahead in both of those instructions

We will go on to keep track of additional developments in this room in the lead up to the May Federal Funds

The current strengthening of the AUD (until eventually the past couple months) will continue to keep imported charge pressures lower, additional assisted by continuing competitive pressures in the retail sector

Even so, the NAB Company Survey proceeds to display deteriorating conditions in the retail industry, which may well hamper the industry’s capacity to soak up any additional imported charge pressures in the long term

Cyclone Debbie which hit Queensland in late March has induced injury to crucial crops and will elevate headline inflation in Q2 through higher fruits and vegetable price ranges but will not influence core inflation

Over-all, our inflation outlook is mainly unchanged, with core inflation underneath two% in 2017 and 2018, selecting up to two% y/y by conclusion-2019

Headline inflation is a small higher thanks to temporary cyclone impacts, gas price and tobacco excise raises