Your 10-second guide to today's Australian inflation report

Australia’s March quarter inflation report will be released at 11:30am AEST today.

With the Reserve Bank of Australia (RBA) facing competing challenges from extra slack in the labour market and rising house prices, the general consensus is that interest rates will remain on hold for the rest of 2017.

Despite that, analysts will be closely watching today’s release as CPI data has the capacity to surprise and can influence the RBA’s interest rate outlook.

Here’s the state of play:

• During the December quarter last year, headline consumer price inflation (CPI) rose by 0.5%, leaving the year-on-year increase at 1.5%.
• The quarterly increase missed expectations for a rise of 0.7%, and was lower than the 0.7% level reported in the September quarter.
• Underlying CPI, or core, of more importance to financial markets given its implications for Australian interest rates, increased by 0.4% over the quarter.

• Upward revisions to data from prior quarters left the year-on-year rate at 1.55%.
• Like the headline figures, core inflation missed expectations with forecasts predicting a 0.5% rise.
• Of the 27 economists polled by Bloomberg, the median forecast looks for a quarterly increase in headline CPI of 0.6%, with the year-on-year rate expected to lift to 2.2%.
• The core inflation reading — the average of the ABS’ trimmed mean and weighted median figures — is expected to rise 0.5% during the quarter, leaving the increase on a year earlier at 1.8%.
• This would mark a slight increase from the December quarter, but would still be in line with the Reserve Bank of Australia’s (RBA) forecasts which have it remaining below 2% until mid-2018.
• The RBA’s next board meeting and official cash rate announcement is on May 2.

Business Insider will have full coverage of the release as soon as the data hits the screens.

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