Morgan Stanley on a Reserve Bank of Australia rate hike still to come:
- The RBA now appears comfortably in data-dependent mode, with little suggestion that it needs to front-load the tightening that is incorporated in its forecasts
- However, its inflation path suggests little room for surprises
- As such, we now expect a final rate hike at the next forecast update in November, lowering our terminal rate forecast from 4.60% to 4.35%. The risk to our forecast is a more extended period on hold.
Comments come after the RBA left its cash rate on hold again this month:
- RBA leaves cash rate unchanged at 4.10% for a second straight meeting
- ForexLive European FX news wrap: Aussie knocked lower by RBA
Of the big four banks locally here in Australia, only NAB expect another rate hike:
ANZ, CBA and Westpac all expect the RBA hiking cycle is over.
RBA cash rate vs. inflation