Inflationary forces continued to intensify in key regions, which suggested inter- est rates could be raised more quickly and more aggressively than previously anticipated. The likelihood of rising borrowing costs also appeared to spook equity markets, which performed poorly over the month.
Trimmed mean inflation – the Reserve Bank of Australia’s preferred underlying measure of price increases – rose 1.4% in the March quarter; almost double the official forecast from as recently as February.
On an annual basis, inflation has quickened to 3.7%; up from 2.5% in the December quarter and well above the Reserve Bank of Australia’s 2%
to 3% target range.
The November CPI print showed that monthly trimmed mean inflation decelerated from 3.5% to 3.2%. While services and housing inflation continued the downward trend, electricity prices surprised to the upside after various subsidies came off.
Manufacturing PMI in November increased to roughly 50, hovering near the breakpoint between expansion and contraction.
