Australia’s Q1 CPI figures print flat increasing estimates of a May rate cut
Official figures show Australian CPI printed flat in Q1, causing the Australian dollar to take a tumble.
According to the Australian Bureau of statistics (ABS), the Australian CPI in March 2019 was recorded flat at 0.0%, compared with a rise of 0.5% in the December quarter 2018.
The flat number was a result of price rises in a few goods and services being fully offset by a few price falls, according to the ABS.
The CPI rose 1.3 % through the year to the March quarter 2019, after increasing 1.8% through the year to the December quarter 2018.
Reserve Bank of Australia
The soft Q1 CPI data has in turn increased expectations of a near-term rate cut by the Reserve Bank of Australia (RBA)
According to Eikon RBAWATCH, the market is pricing in a 45% chance of a May interest rate cut by the RBA.
Most significant price rises and falls
During the March quarter, vegetables rose 7.7%, secondary education 4.2% and motor vehicles rose 2.4%. It comea as, dire weather conditions and drought caused a reduction to the supply of a selection of fruits and vegetables.
Some of the other significant price falls in the March quarter were automotive fuel, falling 8.7%, while domestic holiday, travel and accommodation fell 3.8%. International holiday, travel and accommodation fell 2.1%.
Lower world oil prices at the end of 2018 saw automotive fuel prices fall 6.1% in January, before rising in February and 5.2% in March.
Australian dollar price
AUD/USD tumbled on the news, falling to $0.7050, while the ASX leaped higher up 0.9%, at time of writing.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
