Inflation numbers likely to keep RBA on hold well into next year
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Why did Aussie inflation rise above expectations and what does it mean for the RBA?
Aussie inflation numbers were a bit higher than expected yesterday. On the surface, it didn't seem too great, but lurking underneath were some worrying indicators, which is why NAB is now expecting that the RBA is going to cut rates next time, well into next year. We'll look at the reasoning behind all of that. Plus, a new governor for the RBNZ and markets today, basically doing the opposite of what they did yesterday. It's Thursday, it's the 25th of September 2025. The morning call from Nab. Good morning. Now, incidentally, next week on the weekend edition, uh NAB CEO Andrew Ervin is our guest. So another episode with Ask Andrew, where you get to ask him anything you want within reason, uh on the bank, on the economy, finance, technology.
I mean he does have a fair bit of world experience as well, which you might want to quiz him on. Uh whatever your question, send an email with it. Uh you can also attach a sound file if you'd like your own voice to be featured on the podcast. Whatever, however you want to do it, send it to morningcall at nabb.com.au. Now you need to get in quickly on this. Morningcall and nabb.com.au. Now, on the markets, the US dollar is 0.6% higher today on the DXY, up over 97.9 a little bit earlier. Whereas the Aussie dollar is down, but just 0.3% down to 65.8 US cents. The euro is down 0.7%. The pound down 0.6%. US equities are down as well. The Nasdaq at close, uh a third of a percent lower, the SP down 0.3%, the Dow 0.4% lower.
In Europe, the DAX is up a quarter percent. The FTSE 100 is up 0.3%, but the CAC Carron lost 0.6%. In bonds, well, four basis points lower for US uh ten-year treasuries, but no big moves to speak. Of in Europe. Aussie 10 years rose two basis points yesterday to 4.28%, but this morning on futures much higher, more like 4.37%. So that's a nine basis point move.
Which services‑inflation indicators are driving the surprise in the CPI data?
And then oil is higher, 2.3% added to the price of WTI and Brent. Brent now over 69 a barrel. And gold has fallen back by 1.4%. Incidentally, Energy stocks doing the best in the USA today. Uh, they're up one and a half percent this session, whereas tech for change is down 0.7%. The exception to that is Intel. Their shares are up on speculation that Apple might be investing in the company to help its growth. So Intel shares up over six percent today. And the big news from yesterday, and the repercussions from it, let's talk through it with Nabs Taylor Newton in Melbourne. Aussie CPI for August, year On year, three percent. That's up from two point eight percent in July. I think NAB and the market was expecting uh inflation was gonna rise a bit, but not this much.
But I mean we're not talking about a big rise here, so why the concern?
Yeah, good morning, Phil. Um I think yeah, the monthly CPI, obviously the the big news. What I would say there is that the you know, the headline rating that you mentioned there, that's not that's not really the story. That's not really where the surprise came from. That can always kind of move around a bit. Um it's more the the detail. And so, you know, we know we've talked before that kind of headline inflation had been held down by electricity subsidies, it was going to be moving higher up towards probably a little bit through 3%. Um so that rise up towards 3% isn't going to isn't you know too uh eye popping. Um even when you look at the the core measures, remember that the the monthly uh CPI is only an indicator at at this stage.
We'll be moving to a full uh monthly CPI for the October month, but for now it is still the the partial indicator and the the underlying measures There, you know, you hear people talk about that annual trim mean measure that actually fell a tenth from two point seven down to two point six percent, but that's a a different measure to the the quarterly trim mean that the RBA looks at. It it looks at price changes over the whole year.
How is the stronger services inflation affecting the RBA’s trim‑mean forecast?
So that was pulled down by some base effects prices compared to a year ago rather than kind of prices compared sequentially to the previous quarter. Um so you know, this the extent of the surprise or or upside surprise isn't really obvious in in any of those kind of headline numbers from the release.
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Chapters
8 chapters
1
Why did Aussie inflation rise above expectations and what does it mean for the RBA?
0:01–1:56
2
Which services‑inflation indicators are driving the surprise in the CPI data?
1:56–3:50
3
How is the stronger services inflation affecting the RBA’s trim‑mean forecast?
3:50–6:19
4
What new timeline is NAB forecasting for the RBA’s first rate cut?
6:19–9:15
5
How are labour‑market trends influencing confidence in a rate‑cut decision?
9:15–11:37
6
What impact did the latest services data have on market pricing for RBA cuts?
11:37–14:15
7
How might the upcoming RBNZ governor change affect regional monetary policy?
14:15–16:32
8
What are the key takeaways from the global market snapshot (US, Europe, Germany) for Australian investors?
16:32–16:52