The Australian Bureau of Statistics released the July Consumer Price Index (CPI) on the 26th, which rose 1.0% month-on-month, exceeding market expectations of a 0.8% increase. The rise was mainly driven by higher fuel and travel costs. On an annual basis, the CPI slowed from 3.8% to 3.5% due to the exclusion of large increases from the previous year, but still beat the expected 3.3% rise. The trimmed mean, which indicates core inflation, rose 0.5% month-on-month, surpassing the expected 0.3% increase, raising the risk of further rate hikes. The annual growth rate was 3.6%. The Reserve Bank of Australia has implemented three rate hikes this year to bring core inflation back to its 2-3% target.
Core inflation beat expectations, raising rate hike risks, pushing yields up.
