Q4 CPI Set to Shape Near-Term Outlook

• Market attention is squarely on Q4 CPI, with headline inflation expected at 3.6% y/y, while underlying pressures may remain firm, as the trimmed mean is forecast at 0.9% q/q
• Recent NAB survey results suggest the economy carried reasonable momentum into late 2025, even as confidence indicators softened earlier in the quarter.
• Business conditions strengthened further, lifting to +9, supported by improvements in trading activity and profitability, while employment intentions remained steady.
• After sharp declines in prior months, business confidence showed signs of stabilising in December, edging 1 point higher and indicating sentiment has not worsened further.
• Capacity utilisation eased back to just above 83%, retreating from recent highs but still sitting comfortably above long-run averages, pointing to lingering capacity constraints.
• Offshore, attention turns to the FOMC, where policymakers are widely expected to hold rates steady following three consecutive cuts. The decision is due at 6:00am Sydney time.