Australian inflation and cost of living

Posted: October 28, 2016 in Uncategorized

The inflation data released, while low overall, picked up in the last Wednesday report with stronger “consumer lead” inflation (clothes, housing and an incredible +19% quarter on quarter for fruits and vegetables), while transport and “imported items” inflation is down.

While the RBA will maintain an easing bias…there is no rush to cut as the big risk in the RBA mind (deflation) eased off.

This tells you a few things

If you feel like the real inflation is higher….you are right. You buy much more “fruit and veggies” stuff than big item ticket like cars and TV.

As inflation boost the Australian yields (Government Treasuries) more foreign money get parked in Australia and the AUD will remain stronger for a while.

 

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