The S&P/ASX 200 Index (ASX: XJO) was up 0.2% when the clock struck 11:30am AEST today.
The positive momentum continued for Aussie shares in morning trade, partly buoyed by the strong performance of United States stock markets overnight after the three-day US holiday weekend.
Following an upswing in US consumer confidence and a big fall in global bond yields, the S&P 500 Index (SP: .INX) closed up 2.1% on Tuesday while the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) gained 2.5%.
As for the ASX 200, the benchmark index held on to its intraday gains after the Australian Bureau of Statistics (ABS) released the latest batch of inflation data for April at 11:30am.
ASX 200 investors are keeping a close eye on inflation in hopes of further interest rate cuts from the Reserve Bank of Australia. On 20 May, the RBA cut the official benchmark interest rate by 0.25%, bringing rates down to 3.85%. The RBA will announce its next interest rate decision on 8 July.
Here's what we learned from the ABS today.
ASX 200 and Aussie inflation both steady
The ABS reported that Australia's monthly Consumer Price Index (CPI) indicator rose 2.4% in the 12 months to April, slightly overshooting consensus estimates of a 2.3% increase.
But in a promising sign ASX 200 investors could see another RBA interest rate cut in July, inflation has not rekindled over the past three months, despite potential price pressures from the Trump tariffs.
"Annual CPI inflation has been steady at 2.4% for the past three months," Michelle Marquardt, ABS head of prices statistics, said.
The biggest inflation drivers were the 3.1% increase in food and non-alcoholic beverages prices; the 2.2% house price increase; and a 3.6% price hike in recreation and culture.
ASX 200 investors don't appear overly concerned that annual trimmed mean inflation – the RBA's preferred gauge which excludes certain volatile items and holiday travel – ticked slightly higher.
Marquardt said:
Annual trimmed mean inflation was 2.8% in April 2025. This was up slightly from the 2.7% inflation in March and has remained relatively stable for the past five months.
The CPI excluding volatile items and holiday travel measure rose 2.8% in the 12 months to April, compared to a 2.6% rise in the 12 months to March.
And government rebates in the electricity markets continue to help dampen inflation pressures.
"Electricity fell 6.5% in the 12 months to April. Without all the Commonwealth and State government rebates, electricity prices would have risen 1.5% in the 12 months to April," Marquardt said.
Commenting on the prospects for ASX 200 investors to see back-to-back interest rate cuts, eToro market analyst Josh Gilbert said:
The RBA remains cautious about inflation and is not jumping the gun when it comes to potentially cutting rates again, with governor Michele Bullock confirming she 'did not know at this point' whether we're headed into a long series of interest rate cuts.
