The Melbourne Institute’s Inflation Gauge is an attempt to replicate the ABS consumer price index (CPI) on a monthly basis instead of quarterly. It has turned out to be a reliable leading indicator of the CPI, although there are periods in which the Inflation Gauge series and the CPI have diverged, only for the two series to eventually converge over the space of six to twelve months.
During November, the Inflation Gauge increased by 0.2%, which takes the annual rate to 2.7%. In October, the comparable figures were 0.3% and 2.6%.
Markets barely reacted to the figures and yields on 3 year and 10 year bond futures were only a little higher by the end of the day. The 3 year yield was 2bps higher at 1.97%, the 10 year yield inched up 1bp to 2.56% and the local currency slipped to just under 76.00 U.S. cents.