Headline takeaways

• CPI +1.3% q/q (vs. 1.1% cons., 0.7% prior); +3.2% y/y (vs. 3.0% cons., 2.1% prior). Strongest quarterly rise since Mar-2023; highest annual print since Jun-2024 (3.8%). (ABC)
• Trimmed mean accelerated to +3.0% y/y and +1.0% q/q, topping expectations—signalling underlying pressure beyond headline volatility. (ABC)
• Electricity +9.0% q/q was the single biggest driver, with housing, recreation and transport also contributing; delayed rebates lifted out-of-pocket power costs. (ABC)
• Immediate market reaction: AUD/USD ticked higher; rates pricing pushed back prospects of a November RBA cut. (Investing.com India)

Macro & policy view

The upside surprise—across both headline and core—argues for RBA caution on further easing, with a higher bar for near-term cuts unless the labour market softens meaningfully. Market commentary tilted hawkish, with some desks flagging risk the next move could be up rather than down if momentum persists. (The Australian Financial Review)

Market implications

• FX (AUD): Supported on the crosses by the core beat; dips likely cushioned while inflation breadth stays firm. (Investing.com India)
• Rates: Front-end yields biased higher as traders fade November cut odds and re-price the easing path toward late-2025. (The Australian Financial Review)
• Equities: ASX underperforms cyclically sensitive pockets as sticky services inflation complicates the policy glide path. (ABC)

Data details

• Quarterly CPI: +1.3% q/q; contributions from housing (+2.5%), recreation & culture (+1.9%), transport (+1.2%). (Mirage News)
• Electricity: +9.0% q/q on tariff resets and rebate timing effects, lifting the out-of-pocket burden. (ABC)
• Monthly CPI indicator (Sep): +3.5% y/y, up from 3.0% in Aug—confirming renewed price pressure into Q4. (ABC)

What to watch

• Next RBA decision and guidance on the inflation outlook and timing of any balance-sheet (QT) adjustments.
• Wages and labour market prints for evidence of demand cooling needed to reopen the door to cuts.
• State energy rebate schedules and utility price resets that could swing Q4/Q1 headline profiles.