RBA’s hiking cycle may not be concluded yet – Standard Chartered


Share:

Analysts at Standard Chartered note that they have lowered the Reserve Bank of Australia (RBA) terminal rate forecast by 25 basis points but add that the hiking cycle may not be concluded yet.

RBA retained the option to hike further

"We now expect only one more 25bps hike in November vs 25bps hikes each in September and November previously."

"We still expect a hike in November as inflation – while it may have peaked – likely remains too high. There is little margin for error, in our view, considering the RBA’s already-patient stance forecasting inflation to return to the upper bound of its 2-3% target only by 2025. Services CPI remains sticky (services CPI ex-volatile items rose 1.6% q/q SA in Q2 vs 1.3% in Q1)."

"The job market may have peaked but remains tight and should support wage growth. This, along with the monthly rise in home prices, may prop up spending, especially if households dip into their significant excess savings. The lack of a productivity pick-up may also increase unit labour costs, adding to inflation."

"The last RBA policy meeting statement in August slanted dovish, noting that inflation was declining (versus inflation having passed its peak in July). On growth, the central bank indicated that the economy “is experiencing a period of below-trend growth and this is expected to continue for a while”. The meeting minutes were more balanced. The central bank pointed out that the cost of inflation being higher than expected was greater than the cost of inflation being lower than expected, even as risks to inflation were balanced. The RBA also retained the option to hike further.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD ticks north, stands below 1.0950 post-US PCE inflation

EUR/USD ticks north, stands below 1.0950 post-US PCE inflation

EUR/USD battles for direction following inflation gauges. The EU reported softer-than-anticipated price pressures in October, while the US Core Personal Consumption Expenditures - Price Index came in at 3.5% YoY as expected, easing from 3.7% in the previous month. 

EUR/USD News

GBP/USD keeps the red below 1.2650 after US PCE

GBP/USD keeps the red below 1.2650 after US PCE

GBP/USD slid towards the 1.2650 region in European trading hours on Thursday, holding nearby after the release of US PCE inflation. The annual reading matched investors' expectations at 3.5%, while monthly inflation in the US stood at 0.2%, also in line with the market forecast.

GBP/USD News

Gold price steady at around $2,040 after US PCE figures

Gold price steady at around $2,040 after US PCE figures

Gold price (XAU/USD) struggles to gain any meaningful traction on Thursday and consolidates its recent strong gains to its highest level since May 5 touched the previous day. US Dollar gaining modest traction on encouraging inflation gauges.

Gold News

Bitcoin Spot ETF anticipation fuels BTC price rally in spot and futures markets

Bitcoin Spot ETF anticipation fuels BTC price rally in spot and futures markets

Bitcoin Spot ETFs could see a batch approval in January. Eric Balchunas, a Bloomberg ETF analyst shared details of an updated application by asset manager BlackRock. 

Read more

Oil up half it was earlier this Wednesday as OPEC+ Joint Ministerial Committee takes place

Oil up half it was earlier this Wednesday as OPEC+ Joint Ministerial Committee takes place

WTI Oil clings on to 1% gains as OPEC+ meeting enters next phase. The US Dollar is roaring back after a few days of substantial weakness. Oil very volatile ahead of a possible OPEC+ outcome later this Thursday.

Read more

Forex MAJORS

Cryptocurrencies

Signatures