RBA Hike Almost Fully Priced

• It’s RBA decision day, with markets pricing around a 93% chance of a 25bp hike to 4.60% at 2:30pm. Some major-bank forecasts also retain another move in November or early 2027, keeping the focus firmly on Governor Bullock’s guidance.
• Australian yields remain elevated ahead of the decision, with the 10-year edging to 5.46%. Persistent oil and supply shocks continue to complicate the inflation outlook and reinforce expectations for tighter policy.
• US Treasuries sold off sharply overnight, with the 2-year up 7.9bps to 4.93% and the 10-year up 7.6bps to 5.24% as higher oil revived inflation and Fed tightening concerns.
• Brent rose 1.7% to US$106.10/bbl after President Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz. Saudi Arabia restoring some East-West pipeline flows provided only a partial supply offset.
• Also ahead: ABS Monthly Household Spending and US JOLTS data, although the RBA decision and policy guidance will dominate local markets.