Australian may cpi is seen at 4.2% by TD Securities, with the firm also expecting the RBA to keep rates unchanged in August even if inflation is higher than forecast.
TD put its forecast below the 4.3% market consensus cited in the report. It would also mark a drop from the 4.6% reading in April. According to TD, lower transport costs should help the headline figure, because fuel prices fell during the month.
The firm also said recreation prices often ease in May. It linked that pattern to a seasonal lull in domestic travel. However, TD said those drivers are not structural, so the softer reading would offer relief without proving a lasting fall in inflation.
Australian May CPI and RBA Hold View
TD made a firmer call on policy than on the data itself. It said the RBA is likely to stay on hold at its August meeting even if the May inflation result surprises on the upside. As a result, TD’s view points to less two-way risk for interest rate markets around the release.
The source article said the next RBA meeting is set for Aug. 10 and 11, 2026. It also noted that the central bank raised rates at each of its three meetings in 2026 before this expected pause. Meanwhile, a May headline print at or below 4.2% would mark a second straight monthly slowdown.
PMI Data Adds Support
TD also pointed to the June S&P Global Australia Flash Composite PMI. The survey showed softer new orders and easing price pressures. Therefore, TD said the PMI data adds a forward-looking signal that inflation momentum is cooling.
The report said fuel prices may flatter the headline result, so markets will watch underlying details closely. In particular, services and non-tradables inflation remain key for the RBA’s medium-term policy path. Meanwhile, TD’s forecast now lines up with views from National Australia Bank, Commonwealth Bank of Australia and Westpac.
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