The S&P/ASX 200 Index (ASX: XJO) was down 0.3% at 8,633 points at 11:30 am AEST today.
Over the following minutes, the benchmark index jumped 0.4% to 8,668 points to be up 0.1% for the day.
This comes as ASX 200 investors mull over the potential impacts of April’s inflation data, reported by the Australian Bureau of Statistics (ABS) at, you guessed it, 11:30 am.
Here’s what you need to know.
Inflation print juices ASX 200
ASX 200 investors are favouring their buy buttons after the ABS revealed that Australia’s Consumer Price Index (CPI) rose 4.2% in the 12 months to April. That’s down from the 4.6% increase in annual inflation reported in March.
Housing was the largest factor behind the ongoing inflationary uptick, with housing costs up 6.3%. Transport costs were the second-largest driver, up 6.6% from last year. Notably, however, that was down from 8.9% in March as fuel prices have fallen from recent peak levels.
Sue-Ellen Luke, ABS head of prices statistics, noted:
The fall this month includes the halving of the fuel excise on 1 April. Automotive fuel prices are still 23.5% higher compared to February and before the impact of the Middle East conflict.
The impact of higher oil prices has also been seen in products and services with high freight and logistics costs, such as parcel delivery and building materials. This is reflected in price increases of 12.4% for postal services and 4.7% for new dwelling construction compared to 12 months ago.
Indeed, yesterday the ABS reported that fuel prices and supply availability have negatively impacted 72% of Australian businesses in recent months.
Commenting on the economic impacts of the closure of the Strait of Hormuz on Australian businesses, Tom Lay, ABS head of business statistics, said:
Businesses across all industries were impacted by rising fuel costs from global volatility and ongoing supply chain disruptions. One in six businesses experienced disruptions in their supply chain, with transport, logistics, agriculture and small businesses among those most affected.
ASX 200 investors should also keep a close eye on trimmed mean annual inflation, the RBA’s preferred gauge, which takes out certain volatile items.
Somewhat concerningly, trimmed mean inflation increased to 3.4% for the 12 months to April, up from 3.3% last month.
What this means for interest rates in Australia
The Reserve Bank of Australia (RBA) has already lifted interest rates three times in 2026 to combat resurgent inflation. The official cash rate currently stands at 4.35%, matching the highest level since December 2011.
Amid rising interest rates and sticky inflation, the ASX 200 is down 0.9% year to date.
As for what investors might expect from interest rates next, Josh Gilbert, lead analyst for APAC at eToro, noted that the focal point for the RBA will be the trimmed mean inflation print.
Gilbert said:
We’ve seen headline inflation thrown around over the last few months by energy prices and the fuel excise changes, but the RBA cares about what’s underneath.
Ultimately, that trimmed inflation number has been stubbornly above the top of the 2% to 3% target band for longer than anyone is comfortable with, and until that breaks decisively lower, the RBA can’t claim the job is done.
The RBA will announce its next interest rate decision on 16 June.
Stay tuned!
The post ASX 200 jumps as April’s inflation print eases RBA interest rate pressures appeared first on The Motley Fool Australia.
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