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Jul 29 - 12:55 PM

AUD: RBA To Hike 50bps Next Week - Credit Agricole

By eFXdata  —  Jul 29 - 10:45 AM

Credit Agricole CIB Research discusses its expectations for next week's RBA policy meeting.

"We expect the RBA to hike rates by 50bp next week, which would not be a surprise to the market. After all, inflation in both headline and underlying terms are running well above target with domestic demand being a strong driver of prices rises. Australia’s unemployment rate has fallen rapidly and to the lowest rate in nearly 48 years. The AUD’s reaction to the RBA decision will depend on its new forecasts as well as its rhetoric," CACIB notes.

"The central bank will likely upgrade its inflation but lower its GDP forecasts, as higher-than-expected inflation forces the RBA to step harder on the brakes. Inflation will likely be forecast by the RBA to peak at above 7.5% in H222, signalling that the RBA will remain on the rate hike path. We would not expect much change to the RBA’s rhetoric," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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