- The Australian monthly Consumer Price Index is projected to register at 2.3% for March.
- Quarterly CPI inflation is anticipated to moderate further, remaining below 3%, with core inflation metrics aligning with the RBA’s objectives.
- The Reserve Bank of Australia is scheduled to convene in mid-May to deliberate on future monetary policy adjustments.
- The Australian Dollar experiences a slight depreciation against the US Dollar after achieving a new high for 2025.
Australia is poised to release a series of key inflation data points on Wednesday, with financial markets widely forecasting a continued moderation in price pressures at the start of 2025. This anticipated easing of inflation could potentially create a more favorable environment for the Reserve Bank of Australia (RBA) to consider further reductions in its benchmark interest rate. The RBA’s upcoming policy meeting is scheduled for May 19-20, where policymakers will assess the latest economic data and formulate their monetary policy stance.
The Australian Bureau of Statistics (ABS) is set to release two distinct inflation indicators: the quarterly Consumer Price Index (CPI) for the first quarter of 2025 and the monthly CPI for March, which provides a measure of annual price changes over the preceding twelve months. The quarterly CPI report is particularly significant as it includes the RBA Trimmed Mean CPI, a key inflation metric closely monitored by the central bank’s policymakers. This trimmed mean CPI aims to provide a clearer picture of underlying inflation trends by excluding the most volatile price movements.
The RBA opted to maintain the Official Cash Rate (OCR) steady at 4.10% during its meeting in early April. This decision followed a 25 basis points (bps) rate cut implemented in February, which marked the first reduction in the OCR since the commencement of the tightening cycle in 2022. Market participants are closely watching for signals regarding the RBA’s future policy intentions, considering factors such as global economic conditions, domestic growth prospects, and the trajectory of inflation. The central bank’s forward guidance will be crucial in shaping market expectations and influencing borrowing costs across the Australian economy. Furthermore, upcoming releases of employment data and retail sales figures will provide additional insights into the overall health of the Australian economy and inform the RBA’s policy deliberations.
