Annual inflation in Australia slowed more than expected in May, easing pressure on the Reserve Bank of Australia to hike rates further.
Australia’s annual consumer price inflation rose 4.0% in May, down from April’s 4.2% and below the 4.4% consensus forecast. The data marks the lowest inflation print since January 2022, signaling a continued cooling trend.
Analysts had anticipated a modest decline to 4.4%, following April’s 4.2% reading. The softer-than-expected figure suggests easing price pressures, though services inflation remains elevated. Markets will watch for the Reserve Bank of Australia’s next policy signals.
The Australian dollar showed limited reaction, while bond yields edged lower as traders priced in a reduced likelihood of further rate hikes.