Markets React to RBA Surprise Hold

• The RBA left the cash rate unchanged at 3.85%, holding off on a cut until more data, particularly the Q2 CPI is available. Governor Bullock stressed the decision was about “timing, not direction.”
• By the August meeting, the RBA will have a fuller picture, including June labour data (17 July), Q2 CPI (30 July), and additional indicators of household consumption. The decision passed 6–3, with unattributed votes published for the first time.
• In her press conference, Bullock reiterated the RBA remains open to cutting rates, but wants clearer signs that inflation is easing in a sustainable way.
• Yields jumped on the hold, though markets stayed composed. Around 64bps of cuts are still priced in by year-end, with the policy rate expected to trend toward 3.00%.