Inflation going negative
Most economists are expecting interest rates to be hiked by a further 25 basis points on Melbourne Cup Day.
Markets aren't entirely sure, with about 17 basis points priced in, but at this stage in the cycle it may not prove to matter quite so much, as the inflation pulse is being quietly subdued anyway.
We may even talking about interest rate cuts by the back end of next year.
The Melbourne Institute released its monthly inflation gauge today, and it printed slightly negative for October, after being flat in September.
Of course, the year-on-year figures are still gradually working their way down from the supply-shock driven spikes.
However, if you look at the trend over recent months the calls for more action may prove to be fighting yesterday's war.
Over the past three months both headline and core inflation has been tracking at close to zero.
With thanks and a h/t to Dr. Alex Joiner for pulling together the awesome series of charts as usual!
Source: Dr. Alex Joiner, IFM Investors, Melbourne Institute
Like many European countries, then, we'll probably see inflation fall away in time.
In other news, job advertisements fell another -3 per cent last month, so employment data is steadily softening too.
Source: ANZ, Indeed
And don't forget that retail volumes are being slaughtered, in turn sending the Aussie economy into prolonged per capita recession.
It's the race that stops a nation tomorrow...so, if that's your thing, enjoy!
If not, you've got the rate that stops inflation to watch instead.
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