Australian share futures point to opening decline. June quarter inflation data for Australia out today. Wall Street declines ahead of Federal Reserve meeting. Follow updates here.
Markets will be laser-focused on today’s inflation data due later this morning and a surprise print - above the 6.3 per cent consensus forecast from economists - could force the Reserve Bank to hike rates by 75 basis points in its next meeting, ANZ has warned.
ANZ believes CPI will come in higher than forecast at 6.6 per cent year-over-year, while core inflation - which strips away outliers like food and energy - is set to jump 5.1 per cent, according to the bank. Both readings would be well in advance of the RBA’s 2 per cent to 3 per cent target range for each.
“A big upward surprise in today’s Q2 CPI data for Australia could see the RBA move 75bp in August, though we think 50bp is more likely at this stage,” analysts said in a morning note. “We’ve upgraded our inflation forecasts since we published our detailed preview, and now expect headline inflation to accelerate to 6.6 per cent year-over-year and trimmed mean inflation to 5.1 per cent year-over-year,” the analysts said.
“We think the risks are more balanced for these stronger forecasts given ongoing upside inflation surprises globally.”
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