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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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January 19 15:30 UTC Released

USECRI Weekly Annualized

Actual

4.5 %

Forecast

Previous

3.3 %

January 19 15:30 UTC Released

USECRI Weekly Index

Actual

150.3 %

Forecast

Previous

147.6 %

January 21 02:00 UTC 15131513m

PHGDP YY

Actual

Forecast

Previous

6.9 0

January 21 02:00 UTC 15131513m

PHGDP QQ

Actual

Forecast

Previous

1.3 0

January 21 21:00 UTC 26532653m

KRPPI Growth YY

Actual

Forecast

Previous

3.1 %

January 21 21:00 UTC 26532653m

KRPPI Growth

Actual

Forecast

Previous

-0.1 %

January 21 23:00 UTC 27732773m

JPReuters Tankan DI

Actual

Forecast

Previous

27 k

January 22 07:00 UTC 32533253m

NOIndus Confidence

Actual

Forecast

Previous

2 0

January 22 08:00 UTC 33133313m

TWJobless Rate

Actual

Forecast

Previous

3.69 0

January 22 08:00 UTC 33133313m

TWExport Orders YY

Actual

Forecast

Previous

11.6 0

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