Local markets lift as inflation returns to target range

ABC NEWS (Australia)

The local share market rose after new data showed headline and trimmed mean inflation had returned to the target range. Overall inflation over the past four years remains high, around 20%. Latest inflation data has led the futures market to anticipate that the Reserve Bank of Australia will lower interest rates when they meet in two weeks.

Transcript

00:00The June quarter inflation rate was bang in line with market expectations, but core inflation

00:07was a little higher than the Reserve Bank's last forecast – 2.7% versus 2.6%.

00:13But it was close enough for the futures market to take the odds of a rate cut when the RBA

00:17next meets – in a fortnight – from 88% last night to 100% this afternoon.

00:23The odds of another cut this year are also 100%, and the punters reckon the cash rate

00:27will be 3% in March.

00:30Here's a long-term chart of inflation, both headline and core inflation – aka the Truman

00:35Demean where they take out the biggest price moves – and they're both back within the

00:38Reserve Bank's target range.

00:40Happy days!

00:41But that's for economists and other boffins.

00:44The rest of us know that while the rate of price increases has fallen, prices are still

00:48rising.

00:50And this is what's happened over the past four years.

00:53All prices are up 19.3%.

00:55Food – 21.2%.

00:58Education – 22.7%.

01:00Housing – 26.4%.

01:02And healthcare – 18.1%.

01:05By the way, the US Federal Reserve meets tonight and the market odds of a rate cut there are

01:09zero.

01:10The share market rose following the inflation data release with decent gains by banks and

01:15retailers, but play the last post for Bowen Coke and Coal into administration today after

01:21it couldn't pay contractors, and the Queensland Government turned down its request to defer

01:26royalty payments – about 500 people are employed there.

01:30The Aussie dollar fell at first, but went back up again.

01:34And the oil price accelerated upwards after President Trump repeated his threat of more sanctions

01:39against Russia.

01:40And that's finance.

01:41And that's finance.

01:46»

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