Economic and event calendar in Asia 03 November 2026 - RBA rate hike expected
At a Glance
The desk anticipates a tightening action from the Reserve Bank of Australia (RBA) at its upcoming meeting, despite Deutsche Bank's dissenting view. As highlighted in the note by Eamonn Sheridan, overwhelming consensus suggests that a quarter-point hike to 4.85% is imminent, supported by significant inflationary pressures evidenced by a CPI of 3.7% for the September quarter. The market pricing, at approximately 85% for the hike, underscores the general expectation that the RBA is steadfast in its policy adjustment path. Given this context, the Aussie dollar (AUD) is seen as likely to strengthen, particularly in relation to the upcoming inflation data slated for December, which will provide further clarity on the RBA’s direction going into 2027.
Key Takeaways
- 01RBA is poised for a widely expected rate hike to 4.85%, despite Deutsche Bank's hold prediction.
- 02A CPI reading of 3.7% highlights ongoing inflation pressures fueling expectations for further hikes.
- 03Market pricing reflects an 85% probability for the upcoming rate hike.
- 04Institutional forecasts for AUD/USD suggest potential upward movements, with targets varying from 0.6600 to 0.7300.
Full Analysis
What the desk is arguing
The desk expects the RBA to raise rates at its upcoming meeting, with most forecasts anticipating a hike to 4.85%. Per the full note, 31 out of 32 economists have calibrated their expectations towards a tightening response, with only Deutsche Bank advocating for a pause, citing already significant hikes earlier in the year.
The data that supports this view includes the recent CPI reading of 3.7%, which is above the bank's target, reinforcing the narrative of persistent inflation and the necessity for further rate adjustments. The market sentiment strongly reflects this outlook with an 85% probability assigned to a rate hike.
Where it sits in our coverage
Our current consensus target for AUD/USD is 0.7100, within a range of 0.6600 to 0.7300, supported by projections from firms like Rabobank (0.7200) and Nomura (0.7200). Notably, ING recently revised its target to 0.7300.
This perspective aligns closely with the market's consensus view. However, the desk's near-term assessment appears to align towards the upper range of forecasts, positioning the AUD for potential gains in the wake of the RBA's decision.
How other firms see it
Most firms, including JPMorgan and ING, share the bullish outlook on the AUD, forecasting continued tightening from the RBA, while Deutsche Bank represents a contrarian stance, advocating for a hold based on its analysis of the economic environment.
Observing pairs such as AUD/NZD or commodity prices could provide further insight into potential market movements as they directly intersect with AUD strength and RBA policy.
Market Implications
Traders should monitor the AUD/USD level around 0.7060, as a breach above recent highs could indicate a stronger rally. The decision from the RBA will serve as a critical catalyst for volatility in the AUD, influencing traders' positions.
AUD/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Rabobank | Bullish | 0.7200 |
ING | Bullish | 0.7100 |
MUFG | Bullish | 0.7000 |
From the original
RBA preview: hike widely expected today, but Deutsche Bank tips a surprise hold Earlier: Deutsche Bank stands alone with RBA hold call as 31 of 32 economists tip a hike JPMorgan joins hike call for RBA’s November meeting, sees tightening bias persisting RBA set for fifth 2026 hik
Related speeches
4 itemsDeutsche Bank stands alone with RBA hold call as 31 of 32 economists tip a hike
The desk anticipates a significant divergence from market expectations ahead of the upcoming Reserve Bank of Australia (RBA) meeting. Per the full note [source], Deutsche Bank's lone call for a hold on rates contrasts sharply with the consensus that favors a quarter-point hike, likely leading to a downward revision of the Australian dollar. With the current inflation rate at 3.7%, traders have about an 85% chance priced in for a hike, but the hold call suggests reconsidering the broader economic indicators such as rising unemployment and easing inflation pressures.
RBA set to hike as inflation proves more persistent
The desk anticipates a 25bp rate hike from the Reserve Bank of Australia (RBA) at their upcoming meeting on November 3, driven by persistently high inflation stemming from rising fuel prices and generalized inflationary pressures. Per the full note from ing-think, recent CPI data shows a significant 90bp increase in headline inflation quarter-over-quarter, with annual inflation now standing at 4.3%. This heightened inflation scenario compels the RBA to act sooner rather than opt for a delay until December, leading the desk to forecast a near-term AUD appreciation towards 0.710.
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