What happened
Market pricing for September rate hikes in Australia and the US reached nearly 66 per cent amid persistent inflationary pressures. Tightening capacity utilisation led three major Australian bank economic teams to reverse prior rate cut forecasts. They now join expectations for the Reserve Bank of Australia to raise the official cash rate at its upcoming September policy meeting.
Why it matters here
An RBA rate hike prolongs elevated borrowing costs for Australian households and businesses while pressuring equity valuations. Fixed income investors face continuing yield pressure, turning bond rallies into selling opportunities rather than buying dips. Sustained high cash rates will also continue to dampen domestic consumer spending and weigh on housing sentiment.
What to watch
Local updates from the upcoming NAB Business Survey and ANZ Job Ads releases, public comments from RBA official Hauser, and key US CPI figures due this Friday.
Source
perpetual.com.au