Deutsche Bank-Macro Notes Australia Q4 CPI Chartpack-106232655

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DeutscheBankResearchAustraliaCPIChartpackPhilO’DonaghoeChiefEconomistphilip.odonaghoe@db.comCPIasatQ42023Distributedon:31/01/202403:14:13GMTIMPORTANTRESEARCHDISCLOSURESANDANALYSTCERTIFICATIONSLOCATEDINAPPENDIX1.MCI(P)041/10/2023.UNTIL19thMARCH2021INCOMPLETEDISCLOSUREINFORMATIONMAYHAVEBEENDISPLAYED,PLEASESEEAPPENDIX1FORFURTHERDETAILS.7T2se3r0Ot6kwoPaKeypoints▪Australia’sQ4CPIwassofterthanconsensus:headlinerose0.6%qoq,consensusat0.8%qoq.Trimmedmean,keyforRBA’sdeliberations,printedat0.8%qoq,belowconsensusat0.9%qoqandRBAandDB’sexpectationsat1.0%qoq.Year-endedheadlinenowat4.1%yoy,trimmedmeanat4.2%yoy.▪Immaculatedisinflation?BetweenDecember2022andDecember2023,themonthlytrimmedmeanmeasuredroppedby3.2pptsto4.0%,withone-thirdofthatdeclineinthelasttwomonthsof2023.Ifthatannualdecelerationwasrepeatedin2024,trimmedmeanwouldenduplessthan1%yoy.Abridgetoofarforsure,butithighlightshowquicklyinflationpressureshaveeased,especiallyattheendoflastyear.▪Keytakeaway:AcomfortableCPIprintacrosstheboardfortheRBA.Trimmedmeaninflationprinting0.2pptsbelowtheRBA’smostrecentforecastinQ4isastarkcontrasttotheupsidesurpriseinQ3,andconfirmsthatAustraliaisintunewiththedisinflationtrendseenglobally.Withthat,wehaveincreasedconfidencethattheRBA’shikingcycleisnowover.MarketsarerightlyfocusedonwhentheRBAwillbecutting.Ourcallremainsforcutsbeg...

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