Australia: Upstream inflation pressures are rising - TDS

Analysts at TD Securities note that Australia’s Q2 PPI was benign, reflecting domestic +0.2% cf imports +1.4%, hinting that upstream inflation pressures are rising underneath the headline +0.3%/q print.

Key Quotes

“As reflected in yesterday's import price index (+3.2%/q) the import components of intermediate and crude materials jumped +2.8%/q and +3.1%/q respectively.”

“This 'upstream' inflation will eventually appear in Australia's CPI...but a stream of 'disappointing' CPI reports means the market is not collectively holding its breath yet.”