Oil is the clearest driver of the headline beat, and Bullock tied higher energy prices directly to a worse inflation outlook only minutes before the release, so any further rise in crude adds to the case for tightening.
The bigger signal for markets is the core reading
A trimmed mean that rose to 3.7%, when the RBA had expected it to stabilise, supports pricing for a hike on November 2 and 3, and backs the Australian dollar and front-end yields. The slightly softer weighted median takes a little off that, but not enough to change the overall message. AUD/NZD traders also face the RBNZ decision at 01:00 GMT, where a widely expected hike could limit any relative move in the Aussie. — Earlier: RBA’s Bullock: oil shock means inflation above August forecasts, Board meets next week — Australia’s core inflation picked up instead of levelling off, landing just as Governor Bullock was telling senators that inflation is running above the RBA’s forecasts.
Summary: Q3 trimmed mean CPI rose 1.0% q/q (expected 1.0%, prior 0.8%) and 3.7% y/y (expected 3.6%, prior 3.6%). Q3 headline CPI rose 1.3% q/q, above the 1.2% forecast and up from 0.6%. September CPI rose 0.8% m/m (expected 0.7%) and 4.3% y/y (expected 4.2%, prior 4.0%).