The Reserve Bank of Australia today is due at 7.30pm US Eastern time. A 25bp rate hike is widely expected:
- RBA Preview: Not out of the woods yet - BofA
- The RBA expected to raise its cash rate again on Tuesday, Gov Lowe speaks the next day.
- AUD traders heads up: RBA 'shadow board' recommends a 25bp cash rate hike on Tuesday 7 Feb
Via National Australia Bank's preview, in brief (bolding is mine):
RBA ... is all but universally expected to deliver another 25bp increase to 3.6%. That’s the expectation of all 31 surveyed analysts in the Bloomberg survey, and markets price 23bp, putting more focus on the guidance for the path of hikes from here.
- The RBA’s more hawkish rewrite last month implied at least two more hikes saying “ …further increases in interest rates will be needed over the months ahead…” If that line is repeated then the RBA looks set to hike in April and May absent a big surprise in the data.
- Given the run of data has been on the softer side since February, we doubt the RBA would want to pre-commit so firmly, and think a step back in language to something more akin to November and December when the Board expected “to increase interest rates further over the period ahead.”
We get more nuance tomorrow morning when Governor Lowe delivers the Keynote at the AFR Business Summit.
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The hiking path from the Reserve Bank of Australia so far:
