Oil falls below US$100

• RBA Governor Bullock delivered a broadly hawkish message, noting again that inflation is the key concern and that the upside risks previously flagged are indeed materialising, with elevated oil prices threatening higher fuel costs and broader price pressure.
• All four major banks are now forecasting a hike next week, with markets 85% priced and a further hike expected by March. 3yr government bond yields (futures) are unchanged at 4.99%, while the 10yr yield was steady at around 5.30%.
• CBA household spending rose 0.1% in August, slowing annual growth from 5.2% to 4.7%. Recent data has been volatile, though the result suggests a broad based slowdown in spending.
• Oil fell below US$100/bbl on optimism around US diplomatic efforts to end the conflict with Iran, with Saudi Arabia’s East-West pipeline repaired and set to be tested before returning to operation. Treasuries held broadly in line, the 10yr 1bp higher at 4.96%.