JPMorgan joins hike call for RBA’s November meeting, sees tightening bias persisting
At a Glance
The desk views the upcoming Reserve Bank of Australia (RBA) meeting as a critical event for the Australian dollar, particularly following JPMorgan's recent endorsement of a rate hike at the November meeting. Per the full note, a supposed 90% chance of a hike is currently priced in, which suggests that a hold could significantly challenge short-dated bond yields and the AUD. Market participants will be keen on the RBA's future guidance and updated forecasts on inflation, as this will shape positions going forward.
Key Takeaways
- 01JPMorgan has joined the forecast for an RBA rate hike in November, reflecting inflationary pressures.
- 02Market consensus indicates a high likelihood of tightening, around 90%, making a hold the more significant risk for the AUD.
- 03Attention is shifting toward the RBA's guidance on future rate decisions and inflation forecasts, which could have bigger implications for the AUD.
Full Analysis
What the desk is arguing
The desk frames this as a pivotal moment for the Australian dollar, stressing that any deviation from the nearly fully priced hike could lead to a notable downturn. With JPMorgan now joining the call for a hike based on recent inflation data and RBA commentary, the anticipation heightens around the meeting scheduled for 2:30 pm Sydney time on Tuesday.
Supporting evidence comes from JPMorgan's analysis indicating that the RBA is vocal about inflation not being under control. The expectation is for the RBA to maintain a tightening bias amidst economic strain, with inflationary pressure remaining a topic of concern.
The alternative read would suggest that if the RBA were to hold rates, it might signal that inflation concerns have lessened, contradicting the current trajectory of rate increases.
Market Implications
Traders should monitor the RBA's upcoming statement closely. A hold on interest rates could lead to a significant pullback in the AUD from current levels around 0.7060, while a hike coupled with hawkish guidance may push the AUD stronger towards the consensus target range.
AUD/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Rabobank | Bullish | 0.7200 |
ING | Bullish | 0.7100 |
MUFG | Bullish | 0.7000 |
From the original
With a hike almost fully priced, the bigger risk for the Australian dollar and short-dated bond yields may be a surprise hold rather than the move itself. Attention is likely to shift to the RBA’s guidance and the refreshed forecasts in its quarterly Statement on Monetary Policy,
Related speeches
4 itemsEconomic and event calendar in Asia 03 November 2026 - RBA rate hike expected
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.
Deutsche 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.
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