Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The Reserve Bank of Australia is unlikely to be swayed from hiking rates another 25bp at Tuesday's final meeting of the year, despite a slowing in the year-on-year pace of inflation to 6.9% in October, according to Australian Bureau of Statistics data released Wednesday.
The deceleration from September's 7.3% y/y increase in the Consumer Price Index hints at a peak in the price pressures that have forced the RBA to tighten monetary policy a cumulative 275bp since May. However, inflation is expected to remain elevated in the fourth quarter as higher electricity prices filter through, and as the impact of recent flooding on food prices is felt. October's CPI finalises only around 9% of the quarterly CPI basket.
The RBA's November Statement on Monetary Policy forecast a peak in inflation of 8% this quarter, with a return to the Bank's 2-3% target not forecast until 2025. A possible peak in inflation will stoke debate about a pause in the tightening cycle. Policymakers will receive December quarter CPI data on January 31, a week before their first meeting of 2023 on February 7. Overnight indexed swaps point to a terminal rate of 3.7% in late 2023.
RBA Deputy Governor Michele Bullock has downplayed the weight policymakers would apply to the new monthly data. "I’m not so sure that, quite immediately, we will be looking at monthlies," she said. (See MNI BRIEF: RBA's Bullock Says Rates Not Restrictive Yet).
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.