Weekly Updates

In Australia, the RBA increased the cash rate by 25bps to an 18-year high of 4.85%, but the vote was 6-3 split and Governor Michele Bullock signalled a likely pause in the tightening cycle.

In Australia, the CPI inflation figures for September and Q3 surprised slightly to the upside, with annual trimmed mean inflation drifting further away from the RBA’s goal in Q3. RBA officials speaking this week remained hawkish, saying explicitly that the September inflation figures are ‘far too high’.

In Australia, S&P Global flash PMIs pointed to the strongest contraction in private sector activity since March. Hawkish comments by RBA Deputy Governor Andrew Hauser led to a re-intensification of cash rate hike expectations.

In Australia, the minutes from the RBA meeting sounded hawkish. Employment saw an unexpected fall in September, driven by part-time jobs, while the unemployment rate remained unchanged at an upwardly revised 4.7%. NAB business conditions remained unchanged at a slightly negative level, while business confidence deteriorated.

In Australia, Westpac consumer confidence saw another significant decline in October, reaching the lowest level in six months. The Melbourne Institute inflation gauge suggested that price growth stabilised at an elevated level in September, while Melbourne Institute inflation expectations picked up in October but remained well below their April highs.

In Australia, the RBA increased the cash rate by 25 basis points to 4.60% as expected. The central bank warned that further rate hikes are likely, but expressed hopes that they will not be necessary.