RBA rate cut expectations ease further after the Q3 CPI data today
Arguably the final hurdle ahead of next week's RBA meeting decision has been overcome after the release of the Q3 CPI data earlier today. The readings were more or less in-line with expectations and that saw RBA rate cut bets for November pull back further.
As it stands, cash rate futures see a ~94% probability of the RBA staying pat next week from about ~87% yesterday and ~78% from a week ago.
That is one of the reasons keeping the aussie a tad more steady over the past few days but even as the RBA looks set to keep monetary policy unchanged, the outlook remains more cloudy amid uninspiring economic data.
The central bank has recently alluded to the weaker aussie helping out the economy but on the inflation front, it hasn't really translated to much:
The trimmed mean reading (the RBA's preferred measure of inflation) continues to rest under the central bank's target band of 2% to 3% and has been that way since 2016.
Despite the rate cuts and a supposedly weaker aussie, there hasn't been promising signs of a significant return of inflation - and wage growth - and that will continue to pose a problem for the RBA in its decision making in 2020.
We may not see a rate cut next week but one for December certainly cannot be ruled out just yet and next year, expect there to be a heavy debate on zero rates and QE as the global economy continues to grind slower and slower.