Australia's Inflation Surges in July, Rate Hike Odds Increase

Australia's consumer prices surged in July, fueled by higher fuel and travel costs. The Australian Bureau of Statistics reported that the monthly consumer price index (CPI) rose by 1.0% from June, exceeding the anticipated 0.8% increase.

Fuel prices jumped 7.5% after three months of declines, contributing to the overall rise in inflation. Core inflation, measured by the trimmed mean method, also exceeded forecasts, increasing by 0.5% in July and leaving the annual rate at 3.6%.

Market participants expect another interest rate hike from the Reserve Bank of Australia (RBA) next month, with a probability of 27%, up from 17%. An 80% chance is priced in for a move by February next year.