Reserve Bank of Australia decision due imminently, preview

The RBA statement is due at 2.30pm Sydney time, which is 2230 US Eastern time and 0330 GMT.

• a +25bp rate hike is a near-unanimous expectation among analysts
• market pricing is more circumspect, just under 60%

As a side note after the Reserve Bank of Australia announcement there will be a big horse race in Australia – its so big that it’s a partial public holiday in Australia (official in Australia’s second most populous state and unofficial everywhere else). There is a horse in the Melbourne Cup field called”More Felons”. Seems appropriate for RBA day.

Anyway, this via National Australia Bank. I haven’t posted a preview from NAB as they were forecasting the November rate hike well ahead of everyone else, and even ahead of the most recent rise in official quarterly inflation that prompted the rush to predict the hike. Here’s a brief comment from analyst at NAB now:

• NAB expects the RBA to hike rates by 25bp to 4.35% and to retain a clear tightening bias.
• A hike is also the pick of 29 of 32 analysts in the Bloomberg Survey, while markets are pricing a near 70% chance of a hike.
• 38bp of tightening is priced by mid-next year.
• There will be some detail of the forecasts in the post-meeting statement, but the full detail will have to wait until Friday’s SoMP.
• Key for markets, should the RBA deliver a 25bp hike as expected, will be the strength of the guidance in the current paragraph. The current, “Some further tightening of monetary policy may be required” has been unchanged since May.

ps. the SoMP NBA refers to is the Statement on Monetary Policy, due Friday November 10.

• The SoMP outlines the Bank’s evaluation of the domestic and global economies, as well as the prognosis for Australian inflation and output growth
• There are also a few boxes released on certain topics of particular interest
• There is a SoMP released four times a year

Earlier:

• Reserve Bank of Australia expected to hike its cash rate by 25bp today, but “a close call”

• Former RBA Board member on ways to lower Australian inflation (& why RBA will hike today)

• RBA Shadow Board recommends a rate hike at tomorrow’s monetary policy meeting

• Failure to act on high CPI threatens to damage the Reserve Bank of Australia’s credibility
• Reuters Poll: RBA to high cash rate to 4.35% on November 7
• IMF tells the RBA to hike interest rates higher, and hold ’em high for longer
• Westpac forecasting a November Reserve Bank of Australia rate hike

• UBS forecasts a November RBA interest rate hike, and likely more to come after that
• RBA rate hike incoming on November 7 – will they hike again in December?
• Commonwealth Bank of Australia forecast a 25bp RBA rate hike on November 7
• Australia – Demand for luxury supercars “through the roof”
• Australian Treasurer Chalmers says inflation is moderating but persistent
• ANZ forecasts a 25bp RBA interest rate hike on November 7 (previous forecast was December)
• Australia – market is rapidly pricing in a November rate hike after surging inflation data
• AUD/USD jumped higher on Australian inflation data, November 7 rate hike is likely now.

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RBA cash rate cycle so far:

This article was written by Eamonn Sheridan at www.forexlive.com. Source