Economic 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.
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.
How firms align with this view
Aligned with the desk view
Contrary positioning
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.
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.
Risks to this view
If the RBA opts to hold rates as per Deutsche Bank's suggestion, it would likely reverse bullish sentiment toward AUD, creating significant downward movement for the currency. Additionally, any abrupt changes in inflation forecasts or macroeconomic indicators could alter the expected trajectory of RBA policy.
AUD/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Citi | Bearish | 0.6700 |
UBS | Bullish | 0.7300 |
UOB | Bearish | 0.7120 |
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 hike to 4.85% as banks flag risk of another move in February ING lifts AUD/USD target to 0.71 as it backs a 25bp RBA hike next week RBA set for back-to-back hike after hot CPI, says Natixis’ Garcia Herrero The Reserve Bank of Australia announces its latest policy decision at 2:30pm Sydney time on Tuesday (0330 GMT, 2230 US Eastern on Monday), with markets and economists overwhelmingly expecting a fifth rate increase this year. Of 32 economists polled by Reuters, 31 forecast a quarter-point hike that would take the cash rate to 4.85% from 4.60%, its highest level in nearly two decades. Australia’s big four banks are among them, as is JPMorgan, which argues that senior RBA officials have signalled that inflation is not yet under control.
Markets price around an 85% chance of a move after September-quarter inflation ran at an annual 3.7%, well above the bank’s target. Deutsche Bank stands alone among major forecasters in expecting a hold. Its chief economist for Australia, Phil O’Donoghue, argues that inflation is tracking the RBA’s own forecasts, that unemployment has already risen to 4.7%, and that the full percentage point of hikes delivered so far is biting.
He believes the board can wait until December, when it will have fourth-quarter inflation data and a clearer view of oil prices after the US midterm elections. Deutsche forecasts Brent falling to $90 a barrel by early next year. O’Donoghue has urged the board to reach its own conclusion rather than follow the market “echo chamber”, pointing to the Reserve Bank of New Zealand’s surprise hold last week.
This is a forecast meeting, so the decision will come with an updated Statement on Monetary Policy and new projections for inflation, growth and unemployment. Governor Michele Bullock’s press conference follows at 3:30pm Sydney time. With a hike largely priced in, a hold would be the bigger surprise for the Australian dollar and short-dated bonds.
If the board does move, its guidance on whether further tightening is needed will be the main focus. This article was written by Eamonn Sheridan at investinglive.com.
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