The RBA is expected to hike the Australian cash rate by 25bp on Tuesday - policy preview

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The RBA is expected to hike the Australian cash rate by 25bp on Tuesday - policy preview

<p>Reserve Bank of Australia monetary policy statement is due at 0330 GMT on Monday, 5 December 2022.</p><p>Earlier:</p><ul><li><a href="https://www.forexlive.com/centralbank/westpac-are-forecasting-a-25bp-cash-rate-hike-at-the-rba-meeting-on-december-6-2022-20221202/" target="_blank" rel="follow">Westpac are forecasting a +25bp cash rate hike at the RBA meeting on December 6 2022</a></li><li><a href="https://www.forexlive.com/centralbank/rba-is-expected-to-hike-its-cash-rate-by-25-bps-in-december-february-and-march-to-360-20221129/" target="_blank" rel="follow">National Australia Bank - RBA is expected to hike its cash rate by 25 bps in December, February, and March to 3.60%</a></li></ul><p>Commonwealth Bank of Australia has been less hawkish than many all the way through the RBA hiking cycle so far. Analysts at the bank see just one more hike, +25bp tomorrow , to a peak of 3.1% for the cash rate. </p><p>Goldman Sachs have a much more aggressive outlook:</p><ul><li><a href="https://www.forexlive.com/centralbank/icymi-goldman-sachs-see-rba-cash-rate-hikes-of-25bp-in-dec-feb-march-april-may-20221118/" target="_blank" rel="follow">see RBA cash rate hikes of +25bp in Dec, Feb, March, April & May</a></li></ul><p>Scotia in Canada:</p><p>Almost all of consensus expects a 25bps rate hike on Monday night (eastern time). Markets are less certain and have about half of a quarter-point rise priced and another half point of rate hikes priced over 2023H1. </p><p>The RBA downshifted the pace of rate increases to 25bps at the October meeting when consensus expected 50bps. Tail risks are more skewed toward passing rather than upshifting the pace again. Wage pressures have intensified ... but the RBA may take comfort in preliminary evidence that a central tendency measure of inflation has begun to ebb (chart 9).</p><p>Note that Scotia's chart is the official trimmed mean. We had data for an unofficial trimmed meane earlier, that one was steady around 4.9%:</p><ul><li><a href="https://www.forexlive.com/centralbank/australian-monthly-inflation-gauge-headline-1-mm-and-core-07-mm-20221205/" target="_blank" rel="follow" data-article-link="true">Australian monthly inflation gauge. Headline +1% m/m and Core +0.7% m/m</a></li></ul>

                This article was written by Eamonn Sheridan at forexlive.com.

Source: The RBA is expected to hike the Australian cash rate by 25bp on Tuesday - policy preview

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