At 11.30am AEDT, the S&P/ASX 200 Index (ASX: XJO) was down 0.1%.
In the minutes that followed, the benchmark Aussie index leapt 0.3% to be up 0.26% at the time of writing.
This move higher follows the Australian Bureau of Statistics (ABS) release of the latest Australian inflation data, covering the month of November.
While the ASX 200 continued to provide term deposit-busting returns of 7.5% in 2024 despite sticky inflation and high interest rates, investors and mortgage holders alike are eagerly awaiting the Reserve Bank of Australia's (RBA) first rate cut.
As you're likely aware, Australia's benchmark interest rate has been held at a 12-year high of 4.35% since the last RBA rate hike in November 2023.
And rates are unlikely to come down until inflation, particularly underlying inflation – the RBA's preferred gauge, which excludes volatile items – sustainably falls within the central bank's 2% to 3% target range.
With that in mind, here's what ASX 200 investors just learned from the ABS.
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ASX 200 rises on core CPI data
The ASX 200 is back in the green after the ABS reported that the monthly Consumer Price Index (CPI) indicator rose 2.3% in the 12 months to November. That's up from the 2.1% increase reported for the 12 months to October.
Driving the ongoing inflationary pressures were a 2.9% increase in the costs of food and non-alcoholic beverages, a 6.7% increase in the price of alcohol and tobacco, and a 3.2% increase in recreation and culture costs.
Helping to tamp down inflation, electricity prices declined by 21.5% with the aid of government funding. And automotive fuel prices came down by 10.2% amid a surplus of global oil supplies.
Commenting on the latest Aussie inflation data that's helping spur an intraday rebound on the ASX 200, ABS head of prices statistics Michelle Marquardt said, "Annual CPI inflation has risen since last month, in part due to the timing of electricity rebates."
She added:
In some states and territories, households received two rebate payments in October in lieu of not receiving a payment in July. From November most households received one payment. As a result, electricity prices fell 21.5% in the 12 months to November, compared to a fall of 35.6% to October."
So, why are ASX 200 investors favouring their buy buttons after the latest inflation news?
Well, that looks to be driven by the decrease in Australia's trimmed mean inflation.
"Annual trimmed mean inflation was 3.2% in November, down from 3.5% in October," Marquardt said. "Annual trimmed mean inflation remains higher than CPI inflation as it removed large price falls for electricity and automotive fuel."
Still, that's getting enticingly close to the upper band of the RBA's inflation target, meaning the first 2025 interest rate cuts could be fast approaching.
