MARKET NEWS
Australia's core inflation hits 16-month high, raises bets for May rate hike
Summary
- Headline inflation stays elevated at 3.8% in January
- Core measure picked up to 3.4% from 3.3%, going wrong direction
- Investors ascribe an 80% chance of a rate hike in May
- RBA Governor Bullock speaks later in the day
SYDNEY, Feb 25 (Reuters) - Australian consumer prices rose by more than expected in January, while core inflation hit the highest in over a year, an uncomfortable outcome for policymakers that raises the risk of another hike in interest rates.
The Australian dollar gained 0.2% to $0.7073, while three-year government bond futures fell 4 ticks to 95.71. Investors raised bets of a rate hike in May from the Reserve Bank of Australia to 80%, up from 76% before the data.
