Australia's April CPI higher than expected, market betting on three interest rate cuts this year.

Australia's April inflation index slightly exceeded expectations, coinciding with the turmoil caused by tariff disputes in the market and prompting the Reserve Bank of Australia to cut interest rates last week. Data from the Australian Bureau of Statistics on Wednesday showed that the Consumer Price Index (CPI) rose by 2.4% year-on-year, higher than economists' expectations of 2.3%. The overall inflation rate has remained within the central bank's target range of 2-3% for nine consecutive months. The trimmed mean indicator, which excludes volatile items such as food and energy (the core inflation indicator monitored by the Reserve Bank of Australia), increased from 2.7% in March to 2.8% in April. The central bank has been closely monitoring the trend of core inflation as government tax refunds and subsidy measures have partly suppressed overall inflation. After the data was released, the Australian dollar rose slightly, and the benchmark stock index gave back some of its gains. The Reserve Bank of Australia announced a "dovish" interest rate cut in May The Reserve Bank of Australia lowered the cash rate by 25 basis points to 3.85% last week, marking the second interest rate cut of the year. Policymakers believe that the risks of rising price pressures are receding. Governor Michelle Bullock hinted after the decision that she is more concerned about the downside risks to economic growth as trade tensions and geopolitical conflicts intensify. Although monthly data may not be as comprehensive as quarterly data that guides central bank policy, it still provides reference for officials at the Reserve Bank of Australia to monitor price trends. Given that the Trump administration's tariff policy threatens global economic activity, inflation issues may take a back seat to concerns about the economic outlook. The next meeting of the Reserve Bank of Australia is scheduled for July 7-8. Traders expect a 70% probability of a rate cut at that time, and believe that there is a high likelihood of three more rate cuts this year.