The annual pace inched up to 1.6%, from a record low of 1.5%, a tentative sign inflation may have finally bottomed after a run of surprisingly subdued readings. Investors reacted by selling interbank futures so that they implied just a 4% chance of a rate cut at the RBA's next policy meeting on Nov. 1. The RBA had repeatedly underlined the importance of the inflation report for policy, and with good reason. It was uncomfortably low inflation readings in the first and second quarters that led directly to rate cuts in May and August, leaving the cash rate at an historic low of 1.5%. It rose 0.7% in the third quarter taking the annual pace to 1.3%, from 1.0%.

Source: The Edge Markets October 26, 2016 03:45 UTC