Heads up: RBA monetary policy decision at the bottom of the hour
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The softer Australian inflation data at the end of July was pretty much the dealbreaker ahead of today's decision. As things stand, traders are not expecting any changes to the cash rate but all eyes will be on what the statement has to offer. Will there be any hawkish indication
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The desk anticipates a hawkish shift from the RBA, likely raising the cash rate to 4.35% in response to persistent inflation pressures, as highlighted in the recent commentary from Justin Low. This move essentially reverses the brief easing cycle observed earlier in 2025, bringing rates back to levels not seen since 2011. Per the full note [source], the RBA's decision comes amid rising core inflation, currently at 3.5%, and geopolitical tensions that could further complicate their policy stance. With traders pricing in an 82% probability of a rate hike today and additional hikes by September, the market is positioned for a more aggressive RBA in the near term.
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