Australia February CPI cools slightly, but energy shock clouds inflation outlook

Hawkish for RBA expectations, as inflation remains above target and upcoming energy-driven price pressures are likely to push inflation higher again. Hawkish for RBA expectations, as inflation remains above target and upcoming energy-driven price pressures are likely to push inflation higher again. Hawkish for RBA expectations, as inflation remains above target and upcoming energy-driven price pressures are likely… Australia’s February CPI showed modest cooling, but inflation remains above target and the data predates a sharp energy-driven inflation shock, leaving risks tilted to the upside. Australia’s February CPI showed modest cooling, but inflation remains above target and the data predates a sharp energy-driven inflation shock, leaving risks tilted to the upside. Summary: Australia February CPI cooled slightly to 3.7% y/y (vs 3.8% prior/exp). Monthly CPI flat at 0.0% m/m, down from 0.4%. Trimmed mean came in soft m/m at 0.2% (vs 0.3% exp), y/y at 3.3%. Inflation still above RBA target band, with non-tradables sticky.… For traders, releases like this can quickly shift rate expectations, currency direction, index futures and broad risk sentiment. Watch the next move in the dollar, front-end yields and index futures to see whether the market prices this release as a true surprise or only a passing headline.