Australian TD-MI Inflation Gauge (Aug MM) 0.5% (Prev. 1%)

Australian TD-MI Inflation Gauge (Aug MM) 0.5% (Prev. 1%)

The TD-MI gauge is a private-sector monthly inflation proxy that sits ahead of the official Australian CPI cycle and is traded as a directional steer on the quarterly print rather than a market-moving release in its own right. A deceleration of this kind is consistent with the disinflation sequence that has characterised the second half of an inflation downcycle, where month-to-month readings have been noisy but the trend has set the RBA debate. The distinction worth drawing is between a soft month driven by volatile components such as fuel and travel and one reflecting broader easing in services and trimmed-mean measures; only the latter has historically shifted the RBA reaction function, which in Australia runs off quarterly trimmed mean rather than monthly indicators. The follow-ons are how this reads across into the monthly CPI indicator and, more importantly, the quarterly trimmed mean, since that is the series on which the board has framed its easing conditions. As a private gauge it carries no policy weight of its own, and the sensitivity of AUD and front-end rates to it has tended to be brief and quickly handed back to the official prints.