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. It has turned out to be a reliable leading indicator of the CPI, although there are periods in which the Inflation Gauge series has diverged, only to return back to similar levels as the official CPI series.
During March, the Inflation Gauge rose by 0.1% and by 2.2% over the last 12 months. February’s comparable figures were -0.3% and 2.1%.
February retail sales and ANZ job advertisement figures were also released on the same day so it is difficult to state if these inflation figures had any real effect on financial markets. The fact the month-on-month change was small but positive probably means bond and currency markets took little notice of them. Yields on 3 year bonds and 10 year bonds were both 2bps lower at 1.93% and 2.71% respectively on the day.