Key Points
- The Australian Consumer Price Index (CPI) rose 3.7% for the 12 months to February, down from 3.8% in January 2026.
- The average wholesale price of diesel jumped to $2.83 per liter by Friday, March 20, compared to $1.62 in February.
The Australian Consumer Price Index (CPI) rose 3.7% for the 12 months to February, down from 3.8% in January 2026, while the Trimmed Mean held steady at 3.7%. While above the RBA’s target of 3.0%, the seasonally adjusted increase of just 0.2% in February offered a glimmer of hope that inflation is easing.
A breakdown shows that most inflationary pressure comes from non-tradables (5.0%) compared to tradables (1.3%). Tradables are goods and services that are largely influenced by international trade prices, such as auto fuel, most food items, clothing, and footwear. Non-tradables such as household rents, health care, and education are mostly influenced by domestic factors.
However, we expect a sharp rise in tradables CPI in March, driven by a massive spike in crude oil prices.
Wholesale diesel prices (TGP) jumped to an average of 283.1 cents per liter by Friday, March 20, compared to an average of 162.3 cents for the week ended February 22—an increase of nearly 75% in just four weeks.
Conclusion
We expect a steep rise in March CPI, which increases the chance of further rate increases from the RBA.
Acknowledgments
- ABS: Monthly CPI
- Australian Institute of Petroleum (AIP): Weekly Diesel Price Report
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.