RBA likely to wait-and-watch for another quarter

Today Australian Bureau of Statistics released inflation number for second quarter which showed that inflation is still undershooting projection and expectation of policy makers.

Consumer price index rose by 0.7% in Second quarter from first and it is up 1.5% from a year ago.

Details of the report showed that,

• While price pressure is subdued for food and non-alcoholic beverages at 1.3% y/y, price for tobacco and alcoholic beverages are up by 4.8% on yearly basis. Prices even rose by 1.2% in Second quarter from first.

• Cost for medical and hospital services rose by 4.5%.

• Most significant price rise was registered in automotive fuel, which rose by 12.2%. Naturally overall transport cost rose by 3.4%

• In past one year cost of education has gone up significantly.

• Significant price fall were registered in domestic holiday travel (-5.4%) and pharmaceutical products (-1.8%).

With mixed picture in price rise RBA is likely to wait another quarter report, before considering further move.

RBA's preferred inflation indicator (trimmed mean) measured price rise of 0.6% in June quarter from March and 2.2% from a year ago.

Aussie is currently trading at 0.741 against dollar.