Australia’s monthly CPI rose 4.9% y/y in Jul, easing from 5.4% in Jun, and the peak of 8.4% in Dec 2022. On a month-on-month basis, CPI rose 0.3% in Jul, also lower from the 0.7% m/m increase in Jun. 

The latest monthly inflation print vindicates the Reserve Bank of Australia (RBA)’s decision to stay pat earlier this month (1 Aug), when it held the cash rate target unchanged at 4.10%, 

However, we believe there is a chance it will hike one last time this year, taking the cash rate target to a peak of 4.35%. In terms of timing, this is likely to occur at the 7 Nov meeting, following the release of the 3Q23 CPI on 25 Oct.