Australia politics live news: Penny Wong says PM ‘refusing to take responsibility in the Pacific’; 50 Covid deaths

Cost-of-living issues have been nudged out of the election campaign lately by fears of a Chinese base in Solomon Islands 2,000km from Australia.

(Barnaby Joyce dubbed it “Australia’s Cuba” – although Havana is less than 370km from Miami, but who’s counting. Beijing can also point to a few foreign bases closer than 2,000km, for that matter.)

Anyway, the ABS will release consumer price inflation figures for the March quarter at 11.30am tomorrow. A big number would likely shift the campaign conversion, not least because markets are firming on an (unlikely, IMHO) RBA rate rise when the board meets on 3 May.

A big headline CPI figure would be one with a “5” in front of it, which we haven’t seen until just prior to the global financial crisis in 2008, although the consensus is closer to 4.5%.

Always confusingly, the numbers will also come out in quarterly terms, and then you get the trimmed mean figure which strips out the more volatile items. (Personally, I’m working on a mean, trimmed figure with limited success.)

The TM number is the one the RBA watches more closely, but the “headline” figure isn’t ignored either, since “inflationary expectations” can’t help but be stoked by what’s in headlines.

The CBA reckons the trimmed mean will land at 3.4%, well outside the 2-3% band that the RBA targets over the medium term, something we haven’t seen in more than a decade. Moody’s Analytics, meanwhile, expects a 3.1% result, just outside the band.

The RBA said in the minutes for its April board meeting on rates that it would be watching developments over “coming months”, which would seem to imply they will hold off until after the 21 May federal election before lifting the cash rate target from its record low 0.1%.

Then again, as Moody’s economist Katrina Ell notes, the RBA has had to change its signalling repeatedly since inflation started to spike at the end of 2021, in part because of eased Covid lockdowns, but also because of surging demand globally.

Russia’s invasion of Ukraine and the subsequent sanctions – but also China’s latest zero-Covid shutdowns – suggest inflation has a way to go here and abroad. The difference is that central banks in New Zealand, the UK, the US and others have already started raising their rates. Already a climate laggard, Australia looks like it’ll be a monetary policy one too.

The property market is among the most sensitive to interest rates. We already suspect house prices are close to their peaks if not already past them in some parts of Australia.

Data out today from CoreLogic reinforces that sense. Even taking into account the reduced auction activity because of the Anzac Day long weekend, clearance rates are continuing to drop.

The real estate data group counted 1,813 homes taken to auction across the combined capital cities this week, down a bit from the 2,087 auctions a year ago.

“Of the 1,414 capital city results collected so far, 67.6% were successful, which is the lowest preliminary clearance rate recorded so far this year,” CoreLogic said.

A week early the preliminary clearance rate of 73.3% fell to to 62.4% at final figures, the lowest final clearance rate recorded all year, extending a decline tracked over the past few months.

This time last year, the rate was substantially higher across the combined capital cities at 77.2%, CoreLogic said.