Australia's latest inflation reading certainly surprised not only the market, but also the Reserve Bank of Australia (RBA) which has slowed its interest rate hike earlier this month.
Unexpectedly, Australia's consumer price index (CPI) jumped 1.8% in the third quarter, beating market forecasts for a 1.6% increase.
In addition, data released by the Australian Bureau of Statistics (ABS) also showed that annual inflation rocketed to 7.3% from 6.1%, the highest since 1990 and almost three times the rate of wage growth.
A measure of core inflation also rose 1.8% in the same quarter, raising the annual rate to 6.1% and well short of the 5.6% forecast.
This figure is certainly not the will of the RBA which expects core inflation to peak at 6.0% in the December quarter while headline inflation is projected to rise to 7.75%.
Following these new readings, analysts warned that both core and headline inflation would edge higher in the fourth quarter.
The Aussie dollar, supported by the weakness of the US dollar, rallied further following the release of this data in the hope that the RBA will return to aggressive policy tightening.
