Aura Group says Australian inflation strengthens case for November RBA rate hike
TLT•Aura Group said September inflation strengthened the case for a November rate hike, with markets pricing nearly 90% odds of a 25-basis-point increase to 4.85% on November 3. Annual headline inflation rose to 4.3%, while quarterly trimmed mean inflation reached 3.7%.
1. Inflation and rate expectations
Aura Group’s October 30 analysis said September inflation strengthened the case for a November Reserve Bank of Australia rate hike. Markets priced nearly 90% odds of a 25-basis-point increase to 4.85% on November 3, with a hike fully priced by Christmas.
2. Price pressures persist
Annual headline inflation rose to 4.3% from 4% in August, partly driven by a 9.4% increase in petrol prices. Trimmed mean inflation rose to 3.7% in the September quarter from 3.6% in June, exceeding market expectations and the RBA’s forecast. Services inflation accelerated to 4.1%, despite slowing economic growth and easing labor market conditions.
