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Australia underlying inflation likely to remain low but stable in Q1, says ANZ Research

Underlying inflation in Australia is expected to remain low but stable in Q1, with the average of the two core measures expected to have risen by 0.4 percent q/q. This would be the third consecutive 0.4 percent quarterly outcome and would see annual underlying inflation lift a touch to 1.7 percent y/y, from 1.6 percent y/y in Q4 2016.

While last week’s meeting minutes highlighted the Reserve Bank Australia’s (RBA) current focus on the labor and housing markets, the CPI print remains of critical importance. The RBA would be disappointed by any further deceleration in underlying inflation.

The ANZ Property-Council survey for Q2 reported a strong gain in sentiment toward residential prices. This measures tends to be coincident with house prices, implying momentum continued to be robust in Q2.

On a more forward looking note, the construction outlook in the survey tends to lead dwelling approvals and commencements by 3-6 months. The recent pickup in this index suggests that the sharp drop in building approvals over the second half of 2016 may be approaching an end.

"The RBA would be disappointed by any further deceleration in underlying inflation.  Our picks for headline and core are below market," ANZ Research commented in its latest report.

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April 28 21:00 UTC Released

MXFiscal Balance (Pesos)*

Actual

340.61 bln MXN

Forecast

Previous

-1.93 bln MXN

April 28 21:00 UTC Released

CNFiscal Balance (Pesos)*

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340.61 bln MXN

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-1.93 bln MXN

April 30 01:00 UTC 564564m

CNNBS Non-Mfg PMI*

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Forecast

Previous

55.10 %

April 30 01:00 UTC 564564m

CNNBS Manufacturing PMI*

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51.6 bln $

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51.8 bln $

April 30 23:30 UTC 19141914m

AUAIG Manufacturing Index

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Forecast

Previous

57.5 %

May 1 00:00 UTC 19441944m

KRExport Growth Prelim*

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Forecast

15.3 %

Previous

13.6 %

May 1 00:00 UTC 19441944m

KRImport Growth Prelim*

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Forecast

21.0 %

Previous

27.7 %

May 1 00:00 UTC 19441944m

KRTrade Balance Prelim*

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Forecast

Previous

6.27 bln $

May 1 00:30 UTC 19741974m

USNikkei Mfg PMI

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Forecast

Previous

52.8 %

May 1 00:30 UTC 19741974m

JPNikkei Mfg PMI

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Forecast

Previous

52.8 bln $

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