Credit Agricole CIB Research discusses its expectations for tonight's RBA policy meeting.
"We think the RBA pricing is too aggressive. The first breach by underlying inflation to just inside the bottom of the target band in over five years is a long way away from the RBA’s benchmark for raising rates – underlying inflation sustainably within the target band. The RBA will likely point out that a large share of the bump in inflation in Q3 was due to potentially temporary factors such as supply-chain blockages as well as oil prices," CACIB notes.
"So, it is unlikely that the RBA will validate market pricing for rate hikes in 2022, but instead will give the nod to the potential for rate hikes in 2023," CACIB adds.