SYDNEY, March 27 Reuters Australia survived sold out Taylor Swift concerts in Sydney and Melbourne without a spike in inflation as travel and hotel costs in other parts of the vast country swung lower in February, leaving interest rates on track to be cut later in the year.

Data from the Australian Bureau of Statistics on Wednesday showed its monthly consumer price index CPI rose at an annual pace of 3.4 in February, unchanged from January and under forecasts of 3.5.

For the month, CPI rose 0.2. The threemonth annualised pace is 2.4, within the central bank39;s target band of 2 to 3.

The Australian dollar eased 0.2 to 0.6519 and threeyear bond futures bounced from earlier lows to be up 2 ticks to 96.42, while markets continued to bet that any rate relief would likely start in August or September.

While it may appear that inflation has bottomed out, base effects over the coming months should make it easier for inflation to resume its descent, said Rob Carnell, AsiaPacific head of research at ING, adding it raised the possibility for some monetary easing later this year.

However, a closely watched measure of core inflation was proving stickier. The trimmed mean rose an annual 3.9, up slightly from 3.8 in January. Policymakers had forecast the gauge to fall to 3.6 by June.

Markets imply around a 68 chance the Reserve Bank of Australia will cut its 4.35 cash rate by a quarter point in August, while a move is fully priced in for September. Futures imply a relatively…