RBA Minutes Take Centre Stage

• Latest readings from last week showed Melbourne Institute consumer inflation expectations edging higher in December, rising to 4.7% from 4.5% in November and reinforcing ongoing sensitivity around prices.
• The move followed the Reserve Bank of Australia decision earlier this month to again hold the cash rate at 3.60%, extending the on-hold stretch to a fourth meeting.
• Recent commentary from Governor Michele Bullock noted Q3 inflation ran firmer than expected, reflecting a mix of temporary factors alongside areas showing more persistence.
• Markets now look ahead to the next inflation checkpoints, with the January 7 monthly CPI followed by the pivotal Q4 quarterly print later in the month, both arriving just ahead of the February RBA meeting.
• Data flow thins into January, though attention turns to the RBA Minutes tomorrow for further clarity on how restrictive current settings are and whether the door to hikes remains open in the first half of next year.