Producer Price Index

PPI plunged 0.8% in the June quarter. This is the biggest decline since the series began in 1998. In the March quarter it fell 0.4%. This trend of a drop in prices paid by Australian producers implies that the broader CPI could fall during the year. If it does the RBA may need to drop rates to avoid an increase in real rates.

The CPI, due out tomorrow, is expected to be around 0.5% for the quarter.