Inflationary forces continued to intensify in key regions, which suggested inter- est rates could be raised more quickly and more aggressively than previously anticipated. The likelihood of rising borrowing costs also appeared to spook equity markets, which performed poorly over the month.
Trimmed mean inflation – the Reserve Bank of Australia’s preferred underlying measure of price increases – rose 1.4% in the March quarter; almost double the official forecast from as recently as February.
On an annual basis, inflation has quickened to 3.7%; up from 2.5% in the December quarter and well above the Reserve Bank of Australia’s 2%
to 3% target range.
Manufacturing PMI in November increased to roughly 50, hovering near the breakpoint between expansion and contraction.
Rising living costs have made it tricky for many Australians to make ends meet.
The presidential election in the US on 5 November could dominate headlines during October, before the next meeting of the Federal Reserve later that same week. Investors are already debating whether a further reduction in borrowing costs in the US could be announced following this meeting.
