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RBA November hike probability rises on resilient households, data center spillovers
The view has shifted enough that a November cash rate increase of 25 basis points to 4.6% is again treated as the base case, while a September hike is less likely though not ruled out.
Action Forex says the RBA has moved back to treating a November rate hike as the base case, citing improved resilience in household incomes and stronger-than-expected spillovers from a data centre investment boom.
The updated outlook points to stronger household sector signals from national accounts and internal data for Q2 and onwards, offsetting a weaker housing market outlook and supporting more resilient spending even as sentiment remains historically weak.
Action Forex also links the growth impulse to an unusually large pipeline of data centre investment, plus related renewable electricity generation and distribution, which it says is expected to support GDP growth while limiting how quickly disinflation progresses.
The outlet adds that RBA leadership would likely prefer a November hike over September, though if some members view the situation as more urgent they could still assemble majority support for September. It expects the September meeting could see a split vote, and emphasizes that the central bank is likely to wait for full quarterly inflation data and revised forecasts, even if the probability of an earlier move is not zero.