CPI

Australian CPI is released today at 11.30am and will be the key indicator as to how the market will price in a hike for next Tuesday (currently around 50%). The majority of economists are expecting a 0.7% number for headline and underlying, and this would see yoy underlying inflation at 2.5%, while the headline CPI would slow to 2.8%yoy. A figure of 0.9%qoq or higher would all but guarantee a rise for next Tuesday.

Data from the overnight session in the US resulted with an initial fall in stock index prices as the Case-Shiller house price index reported a 0.3% fall for August. These results however were reversed as Consumer Confidence came in higher, up from 48.6 to 50.2 in September, and higher than the expected 49.9. In other news from the Northern Hemisphere, UK GDP figures for Q3 came in double the consensus to 0.8% (0.4% expected) for an annual pace of 2.8%yoy. S&P (Ratings Firm) also announced it had upgraded the UK’s sovereign outlook, bringing it back to “stable” and reaffirming the AAA rating. As a result of the combined data, the Pound jumped almost 1%, and just fell short of the 1.5900 mark.

Rural Bank
Bendigo & Adelaide Bank (BAAB)have agreed with Elders Ltd to buy the 40% of Rural Bank that they don't already own. I'll keep you posted as to whether this results in Rural and BAAB coming under the one ADI licence which will impact on spreading deposits to access the guarantee through the Financial Claims Scheme.