Via CBA, their outlook for the Reserve Bank of Australia:
CPI stronger than expected – RBA to hike the cash rate in November
- The headline CPI rose by 1.2%/qtr in Q3 23 and the annual rate dipped to 5.4%.
- The RBA’s preferred measure of underlying inflation, the trimmed mean, increased by a solid 1.2%/qtr and the annual rate stepped down to 5.2 % (from 5.9% in Q2 23) .
- We expect the RBA to act on their hiking bias and raise the cash rate by 25bp at the November Board meeting to 4.35%
More:
- The RBA has a hiking bias. And last night RBA Governor Bullock stated, “the Board will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation” (our emphasis in bold).
- We are not sure what constitutes a ‘material upward revision’ to the RBA’s inflation forecasts . But we consider the lift in underlying inflation over Q3 23 to be sufficiently strong for the RBA to act on their hiking bias at the upcoming Board meeting.
- The RBA tends to place more weight on underlying rather than headline inflation. And their preferred measure of underlying inflation is the trimmed mean.
Earlier:
- Australian Q3 2023 Headline CPI +1.2% q/q (vs. 1.1% expected)
- Australia – market is rapidly pricing in a November rate hike after surging inflation data
- ANZ forecasts a 25bp RBA interest rate hike on November 7 (previous forecast was December)
From the RBA website currently
This article was written by Eamonn Sheridan at www.forexlive.com. Source