PREVIOUS TRADING DAY EVENTS 25 Oct 2023

Australias 3rd quarter, plus yearly inflation data was surprisingly reported higher than expected creating problems for policymakers. The annual pace of inflation slowed to 5.4, from 6.0, but was again above forecasts of 5.3. For September alone, the CPI rose 5.6 yearonyear, up from 5.2 in August.

While 4.35 should mark the peak in the cash rate, there is a risk it could tighten beyond that. Any easing remains a very long way off, said Adam Boyton, head of Australian Economics at ANZ.

The third quarter inflation rise was mainly caused by fuel, rents, and electricity. Fuel prices rose 7.2 from a year ago with the conflict in the Middle East potentially set to further stoke inflationary pressures.

The RBAs August forecast embedded a hope that they were already making inroads into that demanddriven domestic inflation problem, said Taylor Nugent, a senior economist at NAB. The key implication of todays data is that that hope was misplaced.

Source httpswww.reuters.commarketsaustraliainflationsurprisinglystrongq3addsraterisk20231025

The Bank of Canada decided to keep its key overnight rate at 5.0 as expected and have a minimal impact on the markets. The bank increased rates 10 times between March 2022 and this July.

Inflation in September dipped to 3.8 from 4.0 in August and it is expected to return to the 2 target by the end of 2025.

Progress towards price stability is slow and inflationary risks have increased, the BoC…