Australia Inflation Hits 4.6% Y/Y Confirming Forecasts, Fuels RBA Hike Bets Lifting Aussie Dollar

Australia's March quarter inflation surged to 4.6% year-on-year from 3.7%, matching CBA's forecast exactly and driven by an Iran war fuel shock pushing oil above $110 per barrel. This followed hawkish previews from CBA and Westpac on April 28, predicting headline CPI at 1.1-1.5% q/q (4.2-4.6% y/y) and trimmed mean around 0.9% q/q, with explicit calls for a 25bp RBA hike to 4.35% in May. Markets now price a third straight rate increase next week, supporting the Australian dollar vs US dollar on higher yield prospects and persistent inflation risks.