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VIEW: CBA Sees 25% Chance Of 40bp Hike Next Week

RBA

CBA economists expect the RBA to hike rates 25bp at its meeting next week but see a “non-trivial” 25% probability of a 40bp move bringing rates to an even 3.5%. This larger moved would then be accompanied by a statement showing an “intention to pause” if economic developments are in line with the RBA’s updated forecasts. CBA believes that the central bank is close to pausing. Chief Australian economist Baird said "if the RBA is willing to pause in their tightening cycle there is merit in restoring the cash rate to a conventional metric prior to doing so." (The Australian)

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