TD Securities projects Australia’s Q2 core inflation at 3.7% annually, fueling speculation of further RBA tightening amid resilient labor data.
TD Securities forecasts Australia’s core Consumer Price Index (CPI) to rise 0.9% quarter-on-quarter in Q2, matching consensus and accelerating from 0.8% in Q1. The annual rate would reach 3.7%, just below the Reserve Bank of Australia’s (RBA) 3.8% projection.
Headline CPI is expected to hit 4.2% year-on-year in June, above the 4.0% consensus, driven by higher rents and dwelling costs. Upside risks to the trimmed mean CPI could reignite debate over another RBA rate hike as the labor market remains strong.
The RBA’s May Statement of Monetary Policy had projected core inflation at 3.8% for the period, making the 3.7% print slightly softer but still elevated.