Australian Q4 PPI +0.8% q/q (expected +1.0%)

Some further encouraging inflation (admittedly at the producer level, not consumer) data for the Reserve Bank of Australia.

Australia PPI (Q4) ++0.8% q/q

• expected +1.0%, prior +0.9%

For the y/y +3.7%

• prior +3.9%

This week we’ve seen all four of Australia’s biggest banks switch the forecasting a February RBA rate cut, NAB joined ANZ, CBA and Westpac:

• National Australia Bank forecasting a February Reserve Bank of Australia interest rate cut

***

The Producer Price Index (PPI) measures a change in input prices of raw, semi-finished or finished goods and services.

• If input costs rise, some will be absorbed by the producer and some passed on to the consumer. Conversely, if input costs fall, some of the decline will be enjoyed as wider profit margins by the producer and some will be passed on to the consumer in the form of lower prices.
• Because PPI impacts consumer prices, it is watched by central bankers as part of fulfilling their mandate of price stability.

This article was written by Eamonn Sheridan at www.forexlive.com.