"We forecast headline CPI increased by 0.3%/qtr to be 2.9% higher over the year.

We expect the more policy relevant trimmed mean CPI to also show core inflation continued to moderate…

If our forecast for underlying inflation comes to fruition we expect the narrative around inflation being both too high and ‘sticky’ in Australia to lessen.

But like all impending economic releases there is uncertainty around where the data will land.

We stress that our call for the RBA to commence normalising the cash rate in December is conditional on a Q3 24 CPI trimmed mean outcome of 0.7%/qtr or less.

An outcome higher than our forecast will see us jettison our call for a rate cut this calendar year.

The Q3 24 CPI is not the only important piece of domestic economic data ahead of the Melbourne Cup Day RBA Board decision (5 November).

The ABS will also publish September retail trade and an estimate of the volume of retail sales over Q3 24 (due for release on Thursday 31 October).

The following day the official statistician will release the September monthly household spending indicator (MHSI).

These two publications will provide the clearest signal yet on how consumers have reacted to the tax cuts with respect to consumption.

Our expectation is that the consumer response has so far been muted.  The upshot being that savings have lifted over the September quarter. "