Barclays & ING On RBA Post CPI Print

Barclays: "Inflation accelerated to 7.3% y/y, while the trimmed-mean rate registered another record high. Sequential inflation remained steady, increasing pressure on the RBA for another 50bp hike. That said, we expect the RBA to continue hiking by smaller increments as the bank has already factored in high inflation prints."

ING: "At their October meeting, the RBA dropped the pace of their tightening to 25bp, hinting that they would prefer to move ahead at a slower pace as they pushed rates into restrictive territory.

Today's inflation data suggest that this moderation may prove short-lived. It is hard to see how the RBA can ignore such an outsized miss on inflation, even though they have been clear in their statements that they didn't think inflation had yet peaked. This inflation data adds pressure on the RBA to revert to a 50bp tightening pace next month. Though if the wage price data out on 16 November remains moderate, they may be able to drop back to a 25bp rate at the December meeting. "