Inflation Slows in November, RBA Path Still Unclear

• Headline inflation cooled, with annual CPI easing to 3.4% in November from 3.8% in October, coming in a touch softer than the 3.6% market expectation.
• The monthly CPI print was flat at 0.0%, matching October and reinforcing the idea that price momentum slowed into year-end.
• Energy rebates continue to muddy the waters. Electricity prices were still up 19.7% y/y, but well down from October’s 37.1%, largely due to Queensland government rebates.
• Despite the lower than expected result, underlying inflation is still running above the RBA’s comfort zone of 2-3%.
• As a result, views remain split on the RBA’s next move. February is firmly in focus, but the policy path from here is far from clear-cut.