Release Explanation: This release is the Melbourne Institutes measure of the change in the price of goods and services which are purchased by consumers. The report replicates how the Australian Bureau of Statistics calculates the quarterly CPI and strives to closely correspond with the official government numbers. This report comes out monthly rather than quarterly so that makes it a timelier indicator than the quarterly CPI.
Trade Desk Thoughts: The inflation estimate for Australia, released this evening by TD Securities, decreased by 0.2 percent month over month for December. This is the first time that the TD-MI inflation guage has fallen for three consecutive months. In the past 12 months the guage rose by 2.2 percent which was the lowest rate seen since May or 2005. Automobile fuel and fruits and vegetables contributed the most to the fall but were offset by rises in the price of rental accommodations, household supplies, and holiday travel. The momentum of price drops seen recently in Australia makes deflation a risk as inflation could become more pronounced in the first half of 2009.
Trade Desk Thoughts: The inflation estimate for Australia, released this evening by TD Securities, decreased by 0.2 percent month over month for December. This is the first time that the TD-MI inflation guage has fallen for three consecutive months. In the past 12 months the guage rose by 2.2 percent which was the lowest rate seen since May or 2005. Automobile fuel and fruits and vegetables contributed the most to the fall but were offset by rises in the price of rental accommodations, household supplies, and holiday travel. The momentum of price drops seen recently in Australia makes deflation a risk as inflation could become more pronounced in the first half of 2009.
Forex Technical Reaction: The aussie has been rejected from the LFB R1 at .6805 and is heading toward the weeks opening price which gapped up 40 pips.