Monthly CPI

The large headline prints continue, with 6.8% for the newish monthly-release series, YoY.

The market left trying to make sense of how it feels, below, fairly “bouncy” across key variables, suggesting mild confusion.

Partly, that’s because of the adjustments below.

There is some mild reason to feel constructive ex transport, as ones eyes drift across the below, by category, and the explanation for transport is…

…the fuel excise tax impact. Taking that into account, and the adjusted number is 6.5% rather than 6.8%, which is obviously better.

So, overall, some progress across key categories continues to be made, the total data remains a bit murky, not clear that the RBA would have compelling reason to pause in and of itself, using this data, and as such the quagmire continues.

Best to have a portfolio of rates beneficiaries (those that do well when rates go up, like insurance companies, to a lesser extent banks) and the opposite, those that do well when rates go down (health, telecos, REITs).

Plus, if you can buy those defensives when they are out of favour, all the better (noting stocks like RHC, AMC, ASX are very unloved, at the moment, and are “usually” pretty defensive).

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