Australia's Q1 inflation likely lower at 1.3% y/y

Australia is scheduled to release Q1-2015 CPI data on 22 April. Headline CPI inflation is expected to have fallen mildly to 1.3% y/y (0.2% q/q). 

Trimmed mean inflation likely dropped moderately as well, both on slowing house price growth and lower energy prices. Retail sales growth likely picked up in Q1 after a subdued Q4, adding to inflation. 

The food inflation remained low in Q1. Housing inflation - the most heavily weighted component - was likely lower in Q1 than Q4 due to a slowdown in investor mortgage growth, but it is expected to have stayed elevated. 

Good March labour market data would put the focus firmly on the inflation print. 

"We believe lower inflation in Q1 would provide the Reserve Bank of Australia with the impetus to reduce the cash rate in May; we expect a 25bps rate cut", Said Standard Chartered in a report on Tuesday