Headline CPI came in at 1.2% q/q for 3Q23, a tad higher than expectations of 1.1% q/q, and against a reading of 0.8% q/q in 2Q23. Compared to the same period a year ago, CPI rose 5.4% y/y in 3Q23, continuing to ease from the previous print of 6.0% y/y in 2Q23, though a tad higher than expectations of 5.3% y/y. 

Meanwhile, the jobless rate fell from 3.7% in Aug to 3.6% last month even as employers shed 39,900 full-time positions. The swing factor was the drop in the participation rate, easing 0.3ppt to 66.7% in Sep from a record-high of 67.0% in Aug. 

We have been penciling a chance of the Reserve Bank of Australia (RBA) hiking one last time this year, taking the cash rate target to a peak of 4.35%. In terms of timing, we believe this will occur at the 7 Nov meeting, following today’s release of the 3Q23 CPI.