RBA Holds Rates for the First Time in 2026

• The RBA held rates unchanged at its February meeting, leaving the cash rate at 4.35%. The Board maintained its hawkish tone, noting that while growth is moderating and consumer demand has softened, inflation remains elevated enough to keep further tightening on the table.
• Despite this, markets took a more constructive view, with government bonds rallying through the afternoon- 3 year yields shed around 7bps to close near 4.39%, while the 10-year trimmed roughly 6bps to sit around 4.82%.
• The RBA signalled no imminent move in either direction, keeping the door open to further tightening while stopping short of confirming rates have peaked.
• In China, retail sales fell 0.6% year-on-year, missing expectations of -0.2%, while industrial production came in at 4.5% year-on-year, marginally above the 4.4% forecast.
• Attention now turns to the Federal Reserve, where rates are expected to remain on hold. The updated dot plot and Governor Warsh’s inaugural press conference will be closely watched for any indication on the policy path ahead.