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

Every analyst I’ve read on the Tuesday, 7 November 2023 RBA decision has forecast a rate hike.

I have seen a couple of hold outs though. I haven’t managed to read a piece making the arguments for a hold. If I was writing such a piece (I am not as I think the RBA will raise its cash rate today) I’d point o:

• the RBA having been complacent in the past and it wouldn’t surprise me if they are again
• the movement higher for inflation evident in the recent official is not “material” for the RBA’s inflation outlook
• the impact of past rate hikes has not yet fully filtered into the real economy so there is a reason not to hike

From TD:

• expect a 25 bps hike following the outsized Q3 CPI print
• The outcome was material in our view and threatens the RBA’s ability to bring inflation under 3% by Q4’25.
• A hike would be consistent with RBA comments of ‘…a low tolerance returning inflation to target more slowly than currently expected.’
• That said, we do acknowledge the decision is a close call

Bolding mine. Yes, it is. Market pricing is around 60% for a hike.

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Earlier:

• 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.

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

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