Yesterday’s Q3 consumer price data from Australia were softer than the Reserve Bank (RBA) and consensus had expected. Inflation pressures are still likely to rise over the long run but the RBA would face a presentation problem if the cash rate is moved up next week. A shift on 2nd November remains a coin toss but we have changed our forecast and now expect that the next hike will come in December. We still anticipate that the cash rate will move up significantly in 2011 and, accordingly, still forecast that the Aussie dollar will soon reach parity with the US dollar and will then stay stronger than parity.