In another holiday-shortened week the focus this week will be on the March quarter CPI data out this Wednesday. While the underlying drivers of inflation remain subdued, the March quarter is likely be boosted by a perfect storm of higher electricity, petrol and fresh fruit and vegetable prices. Economists are forecasting a rise in the headline CPI of 0.7% (2.3% annually) and a 0.5% rise in underlying inflation (1.8% annually). Despite the rise, the underlying CPI remains below the RBA’s target range (of 2% to 3%) and should therefore not change the outlook for a steady official cash rate.
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