Economists anticipate consumer prices to have risen 6.3 per cent in the June quarter, a level not seen since December 1990.
Investors face the prospect of a quickening pace to interest rate increases as Australian inflation data on Wednesday is expected to show prices rising at the steepest clip in more than three decades, pressuring the central bank to intensify its monetary tightening.P/ASX 200 gained 2.8 per cent last week despite a small decline on Friday. US shares overcame a decline of nearly 1 per cent on Friday to end the week 2 per cent firmer.
The data comes before the RBA’s August monetary policy meeting in which economists from NAB predict a 50 basis point interest rate rise “is almost locked in” as the central bank grapples with an “unexpectedly sharpA 50 basis point increase in August would mark the third such jump in the Australian cash rate in as many months and would raise the cash rate to 1.85 per cent. Three months ago, the rate was at its historic low of 0.
“Ongoing elevated global oil prices are contributing to higher food and transport costs, with severe local flooding also adding to fruit and vegetable prices,” Mr Boak said. “We look for chair [Jerome] Powell to repeat similar messages from the June FOMC meeting,” he added. “Namely that inflation is too high, the Fed is committed to restoring price stability and some pain may be needed to bring inflation lower.”
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