Australia: Inflation gauge rose by 0.1% in February - TDS

Analysts at TD Securities note that Australia’s February inflation gauge rose by +0.1%/m and 1.7%/y.

Key Quotes

“Contributing to the change were fuel +2.2% and fruit & vegetables +3.7%, offset by seasonal correction in travel/accommodation -3.2% and rent (-0.9%/m). The trimmed mean measure was flat and +1.6%/y.”

“Overall, headline and trimmed mean inflation is tracking 1½-1¾% in line with the RBA view. We will call for a cut if the core measure slumps back towards 1%. Dec qtr inventories -0.2% (TD flat and mkt +0.3%).”

“Building approvals +2.5% a little better (mkt +1.0% TD +2%) but a dead cat bounce when we know housing finance is soft. Post inventories lowers our GDP forecast from +0.4% to +0.3%/q. However, tomorrow brings government spending (25% of GDP) and net exports, so there is ample scope to adjust again if necessary.”