UBS response to Wednesday's upside surprise in Australian inflation data, its Australian economist forecasts a 25bp Reserve Bank of Australia cash rate hike at its November 7 meeting:
- “RBA Governor Bullock’s speech last night effectively specified they ‘will not hesitate to raise the cash rate further’ – implying a hike of 25bp at their November meeting – ‘if there is a material upward revision to the outlook for inflation’”
- “UBS has for several months highlighted the material risk the RBA could hike rates in November, particularly if CPI was higher than expected. Well, that’s the case now.
Added that the RBA, like many other DM central banks will keep the cash rate higher for longer.
Says a February 2024 is likely.
The cash rate will go to 4.35% at the November 7 meeting.
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ps. Bullock speaks today:
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The CPI data and responses ICYMI:
- 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.
- Australian Q3 2023 Headline CPI +1.2% q/q (vs. 1.1% expected)