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RBA September timing looks awkward after stronger July CPI
Action Forex argues a November cash rate hike is more plausible than September, because the August CPI release comes the day after the September meeting.
Action Forex says the odds of an RBA rate hike in November have risen after stronger July monthly CPI, but it is not enough to make a November move the base case.
The outlet notes the RBA has warned that monthly data can be noisy, and that the new financial year is often when many businesses reprice, which can make subsequent monthly inflation prints more moderate.
It also points to an earlier data flow that shifted the other way, with labour market and wages data, along with Q2 CPI, coming in softer than the RBA had forecast.
Action Forex adds that if the RBA were to hike at the September meeting, policymakers would effectively be acting just one day before the August CPI release, which could make an early move look premature; it views November as requiring confirmation from intervening data and says split decisions are possible among members leaning toward pre-emptive hikes as insurance against future price spikes.