Bullock Keeps RBA Flexible Amid Conflicting Data Signals

• RBA Governor Michelle Bullock’s fireside discussion with Head of Economic Analysis Michael Plum at the ABE annual dinner attracted stronger market interest than expected.
• Bullock again pointed to ongoing inflation pressures in housing and services, acknowledging that a 30bps upside surprise in the trimmed mean CPI would be considered a “material miss.”
• Addressing questions about how the RBA might balance conflicting signals from inflation and labour market data, Bullock warned against reacting hastily to any single data point, emphasising the importance of gathering more evidence before making policy adjustments.
• Risk sentiment improved modestly as optimism built around Thursday’s scheduled US–China trade talks, lending a slightly firmer tone across global markets.
• In the US, Treasury yields slipped, with the 2-year fluctuating between 3.49% and 3.52%, and the 10-year easing from 4.04% to 4.00%.
• Markets now see close to a 95% chance of a 25bp Fed rate cut at Thursday’s meeting, with investors positioning ahead of what could be a key inflection point for global monetary policy.