TD Research discusses its expectations for today's RBA October policy meeting.
"TD/consensus expects a 50bps hike. On Sep 19th we shifted to 50bps following RBA Gov. Parliamentary testimony on Sep 16th. Then Sep 21st, Dep Gov. Bullock stated rates were not "necessarily in restrictive territory yet" supporting a 50bps hike. Data also supports a 50bps move - vacancies near record high, the u/e rate is low and retail sales/ consumption is firm," TD notes.
"How the RBA could shape the tone of the Statement: Dovish: Removes "The Board expects to increase interest rates further over the months ahead". Neutral: Introduces the word "lags" and/or "the case for a lower pace of increases...becomes stronger as...the cash rate rises". Hawkish: Same Statement as Sep and/or inserts "the general inflation psychology appears to be shifting"," TD adds.
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