RBA To Scrutinise Australian Inflation Data Report

April 25, 2023 11:58

The Australian CPI inflation report for the year's first quarter will be one of the most important data releases for investors and traders as the week starts. Inflation figures are expected to be taken into consideration by the Reserve Bank of Australia (RBA) and may impact the value of the Australian dollar against other major currencies.

Australia Q1 2023 inflation report on Wednesday

The Australian Bureau of Statistics (ABS) will announce the first quarter’s inflation figures on Wednesday morning. Market analysts expect headline inflation to come in at 1.3% on a quarterly basis and 6.9% on a year-to-year basis.  

Economists at the Commonwealth Bank of Australia (CBA) said in a report: “We expect the March quarter CPI to confirm that annual inflation peaked in the December quarter last year. The monthly CPI indicator suggests goods disinflation is occurring in Australia, as it is elsewhere. Services inflation is expected to be a key driver of the increase in prices.”

ECB’s policymakers share insights on monetary policy

In Europe, some European Central Bank (ECB) policymakers have shared insights regarding the euro bloc’s central bank monetary policy. The ECB’s chief economist Philip Lane told journalists that the latest financial data releases show the way for another rate hike in May and noted that it wouldn’t be wise for the ECB to pause its monetary tightening policy plans.  

Francois Villeroy de Galhau, member of the ECB’s governing board and Governor of the Bank of France, said that the eurozone’s headline inflation is expected to come down to the 2% target by the end of 2024, while food inflation will likely start to ease in the second half of this year.  

The ECB’s board member Isabel Schnabel told Politico reporters that a 50bps rate hike is not off the table. “It's clear that further rate hikes are needed, but the size of the rate hikes is going to depend on the incoming data. Data dependence means that 50 basis points are not off the table. We need to see a sustained decline in core inflation that gives us confidence that our measures are starting to work,” she noted.

BoJ Governor Ueda comments on the economy

Speaking in the Japanese Parliament, the Bank of Japan (BoJ) Governor Kazuo Ueda noted that “trend inflation remains below 2% but gradually accelerating, which is partly due to the effect of monetary easing.”

Ueda said that tightening monetary policy now could push down inflation in future, which is already likely to slow on dissipating effect of import costs. The newly appointed governor reiterated that “the risk of inflation undershooting forecast is bigger than the risk of overshooting, which is why the BoJ must maintain easy policy now.”

German economy far away from substantial improvement?

The headline German IFO Business Climate Index edged higher to 93.6 in April from 93.2 in March. The figure came in slightly weaker than the market expectation of 94.

The German IFO Business survey showed that the country’s economy is far away from a substantial upswing. The report said that the economy lacks momentum and that the proportion of companies that would like to raise prices has fallen again.

Does trading on macroeconomic news interest you? Learn how this approach works with our free webinars. Meet and interact with expert traders. Watch and learn from live trading sessions.

Free trading webinars

Tune into live webinars hosted by our experienced traders

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Miltos Skemperis
Miltos Skemperis Financial Content Writer

Miltos Skemperis’ background is in journalism and business management. He has worked as a reporter on various TV news channels and newspapers. Miltos has been working as a financial content writer for the last seven years.