RBA Hike Bets Tumbled as Australian Inflation Slows

Australia's inflation rate slowed in the June quarter, causing traders to reassess their bets on further interest rate hikes by the Reserve Bank of Australia (RBA). The Australian Bureau of Statistics reported that consumer price index (CPI) rose 0.6% in the quarter, down from a 1.4% jump the previous quarter.

Annual CPI eased to 4.0%, from 4.1%, while core inflation measured by the trimmed mean increased by 0.8% in the quarter, just under forecasts of a 0.9% gain. The annual pace picked up to 3.6%, from 3.5%, but came under market forecasts for 3.7% and the RBA's own forecast of 3.8%.

The data has already been overshadowed by a 20% surge in oil prices this month as the US and Iran resumed attacks in the Gulf, which will likely put pressure on inflation in the coming months.