Insights
Energy shocks and sticky costs keep Aussie equities guessing
- Headline inflation in Australia slowed to 4% in May, down from 4.2% in April, primarily dragged lower by a monthly drop of 11.9% in automotive fuel prices.
- Core underlying pressures intensified as the trimmed mean metric accelerated from 3.4% to 3.6%, alongside a 6.5% rise in annual housing costs and a 21.1% spike in electricity expenses.
- Persistent structural inflation maintains pressure on the Reserve Bank of Australia regarding its 4.35% cash rate, forcing major consumer, defensive, and retail entities to manage fluctuating operating margins and shifting household disposable income.
