According to data released by the Australian Bureau of Statistics on Wednesday, the CPI rose by 0.9% in the first quarter, higher than the market forecast of 0.8%. However, the annual inflation rate remains at 2.4%, indicating moderate overall price pressure.

The quarterly increase in 'corrected mean core inflation', which is more closely watched by policy makers, was 0.7%, slightly higher than the expected 0.6%, but the annual rate slowed down from 3.3% in the previous quarter to 2.9%, returning to the 2% -3% target range set by the Reserve Bank of Australia for the first time since the end of 2021.

Although the data was slightly higher than expected, AUD/USD rebounded 0.3% in the short term, and three-year treasury bond bond futures gave up earlier gains. Due to the intensified concerns about global economic growth caused by US tariff policies, investors are almost entirely betting that the Reserve Bank of Australia will cut interest rates by 25 basis points on May 20th.

The Reserve Bank of Australia did not make any adjustments at its April meeting, but hinted that it will reassess its monetary policy stance at its May meeting.

Analysts pointed out that "although the rebound in electricity prices has pushed up CPI, the decline in core inflation has strengthened expectations of easing, which will provide space for the Reserve Bank of Australia to further cut interest rates

The main driving factor for the season was a 16.3% surge in electricity prices, due to the end of some government subsidies for electricity bills, resulting in a rebound in energy costs. Commodity prices rose by 1.3% month on month, rebounding from a nine-year low, while service sector inflation fell to 3.7%, hitting a new low since the second quarter of 2022.

From the daily chart, the Australian dollar is currently hovering around the 0.6400 level against the US dollar, showing an overall trend of oscillation and weakness. Previously, the exchange rate fell below the support level of 0.6380, but rebounded and rebounded after the release of CPI data, forming some short-term support. At present, the price is constrained by the 20 day moving average, and if it cannot effectively break through this pressure level, the rebound may be difficult to sustain.

In terms of technical indicators, the MACD double line maintains a weak consolidation below the zero axis and has not yet formed a clear reversal signal; The RSI index has slightly rebounded to around 45, indicating limited short-term rebound momentum. If it falls below 0.6380 in the future, it will open up downward space; On the contrary, if it breaks through 0.6450 and stabilizes, it may further test around 0.6500.

Editor's viewpoint:

Although the overall CPI in Australia slightly exceeded expectations, the rebound in electricity prices is a one-time factor, and the real policy focus is on the sustained decline of core inflation. As the pressure on the service industry eases and external economic uncertainty increases, the interest rate adjustment window facing the Reserve Bank of Australia is opening. If global growth slows down further, Australia may enter a new round of easing cycle ahead of schedule.