PREVIOUS TRADING DAY EVENTS 26 July 2023

Inflation figures for Australia were reported lower than expected yesterday. Underlying inflation has slipped below 6. Inflation slowed more than expected in the second quarter, suggesting less pressure for another hike. The CPI rose to 5.4 yearonyear, down from 5.5 in May. The trimmed mean rose by 0.9 in the June quarter, pushing the annual pace down to 5.9 and just under forecasts of 6.0.

The inflation picture suggests the risk remains of some further tightening in Australia in the next few months but that at the same time, we are close to the peak in interest rates, economists at NAB said.

Goldman Sachs now expects the RBA to hike two more times. The RBA has warned that some further tightening may be required to bring inflation to heel.

Headline inflation remains far above the RBAs target band of 23, projected to return to the top of the banks target by mid2025. The RBA will release its updated economic forecasts next week. 

Source httpswww.reuters.commarketsaustraliainflationslowsmorethanexpectedq220230726

The Federal Reserve Fed hiked its policy interest rate range by 25 basis points, as expected, with the statement retaining the phrasing that further policy firming may be appropriate. The Fed has unanimously voted to raise the Fed funds target range to 5.255.5, the highest level for 22 years.

The accompanying policy statement yesterday, released at 2100, left the door open to another increase.

The Federal…