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We deep dive into the latest inflation data moments after its release.

Trimmed mean inflation, the RBA’s preferred measure of inflation, came in at 0.8% for the June Quarter. Headline inflation came in at 1%, up 3.8% for the year.

Making up this inflation data:
⭐ ‘Non tradables inflation’ came in at 5%, unchanged from last quarter. This shows domestic based inflation pressures are now driving inflation.
⭐ Goods inflation both ticked up a bit to 3.2% for the year
⭐ Services inflation came in higher at 4.5%.

What does this mean for interest rates?
⭐ While this print does not rule anything in or out, it’s unlikely to drive an interest rate increase next month.

Overall this is encouraging news for mortgage holders. This data set was perceived as ‘dangerous’. 

If it came in above expectations, there was a high chance it could drive a rate rise. This print is more than likely going to continue the ‘holding pattern’ the Reserve Bank of Australia are currently in.

The AUD fell on the news, and the share market went up - indicating traders will pare back bets on any rate rise next week.

Encouragingly, lead data on HOUSING, which makes up 22% of the CPI basket, shows positive signs to future CPI releases. Both asking rents and construction costs are rising at a slower rate. This should put downward pressure on future inflation data.

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