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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
