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RBA tightening debate grows as minutes point to upside inflation risks

TD Securities says a strong July CPI release lines up with the September RBA meeting, making a preemptive rate move harder to dismiss for markets.

Reported · Written up by our desk · Central Banks

The Reserve Bank of Australia tightening debate is intensifying after August meeting minutes that were less hawkish than the June discussion, but still flagged upside inflation risks and the potential for preemptive tightening, according to TD Securities as cited by FXStreet.

FXStreet notes that TD Securities highlights a key decision facing the RBA, whether to act early based on emerging inflation signals or wait for more comprehensive Q3 inflation readings before making a move.

TD Securities also points to the timing of upcoming data, saying the July CPI release aligns with the September RBA board meeting, while the next likely opportunity to hike is in November if the RBA stays on hold longer.

FXStreet adds that markets are watching broader drivers alongside the RBA outlook, including a stronger US dollar tied to US PCE and revised GDP figures, which has pressured commodities like gold as Treasury yields rebounded.

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