- This week’s CPI will be key ahead of the RBA’s 3 November decision, with headline expected at 4.2% (0.7% on the month) and trimmed mean at 3.6%. A miss following the weaker employment print could shift the outlook for a hike, as the RBA decision remains uncertain.
- Assistant Governor Hunter told 60 Minutes the RBA was “not quite yet” done fighting inflation, with aggregate demand and oil price flow-through leaving the economy too hot. The tone echoed Deputy Governor Hauser last week, with markets pricing a 65% chance of a hike on 3 November.
- The Fed also meets this week and is widely expected to hold, with the US 2yr Treasury yield lifting 6bps to 4.69%, restricting the week’s decline to 2.5bp.
- Oil rose to a 6-month high of US$117/bbl over the weekend on a sharp escalation in the Middle East and expectations of stepped-up US military action after the midterms.
