The Q4 CPI on Wednesday is expected to again show modest price pressures, with the underlying rate forecast to rise 0.6% (2.3%yoy) and the headline rate 0.5% (2.4%yoy). Looking ahead, there appears to be little serious inflation risk on the horizon. Any upward pressure on retail prices from the lower AUD is likely to be offset by weak domestic demand and a weak labour market.
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