Inflation cools
The monthly inflation gauge showed an implied fall in prices for October, taking the annual rate of inflation down from 5.6 per cent to 4.9 per cent.
This was lower than market expectations for 5.2 per cent (and, of course, well down from the highs of 8.4 per cent in December 2022).
Source: ABS
James Foster ran through all of the key information here.
As ever, there are some good reasons for caution.
Rents will generally continue to rise over the next 2 to 3 years, for example.
On the other hand, we should get a very timely drop in fuel prices over the next few months, and red hot new dwelling cost inflation should also now ease from here.
The recent global bond rally continues, with dovish words from the Fed, and Australia joining Germany and Spain in reporting softer inflation figures.
Australia's key benchmark 3-year bond yield began the month at 4½ per cent, and will end it at under 4 per cent.
The somewhat weaker than expected inflation figures also broadly ensure that interest rates will be on hold until February.
Looking ahead, we should see some decent goods price deflation in Australia, with some residual price pressures for the cost of services, and holiday travel.
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