If you’re hoping for a rate cut from the RBA this year, today’s inflation number could be your first glimmer of hope.

We get the monthly CPI for August today, and if it comes in at 2.7% or lower, it’ll be a big tick in the box for those of us praying for lower interest rates. The Reserve Bank will also be watching the quarterly CPI in October, but today’s figure is the first real test.

Make no mistake — it’s all about the data right now. The RBA won’t move unless inflation shows it’s heading back to target.

Overnight in the US, the Dow was down 88 points. Nothing major — just a bit of profit taking after the market hit all-time highs. The Fed Chair also stated the obvious, saying stocks are overvalued. Well, duh.

But the more important focus is the data. The US gets two key drops this week: GDP and the Fed’s preferred inflation measure, the PCE Index. That will help shape how many more cuts the Fed delivers. I reckon one, maybe two.

Back here, if we want a cut by November, we need this inflation number to behave — and that starts today.