The Melbourne Institute’s Inflation Gauge is an attempt to replicate the ABS consumer price index (CPI) on a monthly basis instead of a quarterly one. In the last few years, it has suggested higher inflation rates were to come, only to reverse course and fall back in line with official figures.
The Inflation Gauge increased by 0.4% during December after a flat result in November and a 0.10% increase in October. On an annual basis, the index increased by 1.9%, a rate which is a considerable jump from November’s 1.6%.
Bond yields finished the day lower, almost in line with leads from overnight US markets. Yields on 3-year, 10-year and 20-year ACGBs all fell by 3bps to 1.77%, 2.28% and 2.66% respectively. The Aussie dollar moved a little lower during the day and finished at 72.00 US cents.