TD Securities write “we had forecast a 75bps RBA hike at next week's meeting. We now expect the Bank to hike 50bps at the meeting. With Q2 headline inflation underwhelming ours and street forecasts and the Fed unlikely to deliver a 100bp hike, a 75bp RBA hike is difficult to justify. Headline inflation above 6% y/y and trimmed mean inflation at 4.9% y/y, the highest since 2003, keeps 50bp RBA hikes on the map. Aside from amending our Aug call, our rate hike path remains unchanged in 2022 - Sep +50bp, with 25bps hikes in Oct, Nov, Dec taking the year-end cash rate at 3.10%. Our terminal rate forecast remains unchanged at 3.35%, but is now reached in Feb'23, not Dec'22, as per our prior forecast.”
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