Inflation update: the September and September quarter numbers a touch stronger than expected and much higher than the RBA’s last projections (August). Headline inflation above 4%. Core inflation above 3.5%. Pretty much locks in a 25bp hike next week. Probably doesn’t add to chances of a 40bp move or a third hike in December. There is some good news in the latest data but it is swamped by the bad news. The most positive element of the latest inflation numbers is the easing in housing related price pressures. New dwelling costs and rents coming off reflecting the slump in demand for housing this year (both dwelling sales and the small lift in rental vacancy rates). If this continues it bodes well for some easing of core inflation pressures in 2027. The bad news is signs of a lift in the inflation pulse in 2026. Domestic market services is accelerating while the share of CPI basket items rising by 3% or more has risen to 2 year high of 70%. The economy is slowing, housing markets are soft and the unemployment rate is rising. But the RBA has no wiggle room. Inflation expectations are slipping above their target and cost pressures are showing few signs of easing. Their best bet of getting ahead of inflation would be to hike to 5% next week with a 40bp hike. They won’t despite their concerns voiced in a number of public forums over the past few months. Unfortunately, we are going to have to live with inflation for a bit longer. And further rate hikes in 2027 cannot be ruled out.

CommBank: "We now expect the RBA to hike in November to 4.85%. "After a dovish press conference post the September hike, recent RBA communications have corrected that message and turned hawkish, focussing on upside risks to inflation from offshore and from concerns around domestic capacity pressure. "Inflation in the September quarter printed in line with expectations but overall remains too high. "There remains a risk of further rate hikes due to structural forces though this will wane if there are clearer signs of a slowing economy from here as we expect. "Further tightening after November will very much depend on the progression of the Australian economy, the Middle East conflict and inflation data. "As we have noted there is an ongoing duel between cyclical factors and structural factors. "Weak productivity in Australia is an ongoing challenge that is constraining Australia’s speed limit together with the global capex cycle adding to demand. "These structural forces will keep the RBA on edge as we enter 2027." #ausecon #investing #ASX #bonds

I really think you have to get long lithium here. Share prices are at a huge disconnect. I don't see EV's slowing down, in fact i think Iran is a great example of why this is only going to speed up. Happy to concede I was wrong on EV momentum. $LTR $PLS

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