TD on RBA rate hike statement: "no suggestion the Bank was considering a pause just yet"

We had the Reserve Bank of Australia rate hike yesterday, accompanied by a leaning hawkish statement. Summary in the wrap:

ForexLive Asia-Pacific FX news wrap: RBA hikes cash rate by 25bp as expected

More detail:

• AUD/USD up a few tics after the RBA cash rate hike and statement suggesting more to come
• RBA raises its cash interest rate by 25bp, as expected

TD on the statement:

• statement offered no suggestion the Bank was considering a pause just yet. It reiterated its forward guidance as it has since the October meeting that "The Board expects to increase interest rates further over the period ahead
• "The RBA's decision to retain this segment of its forward guidance was the right course of action. Pre-empting the Q4'22 inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term print and signalling a potential pause in today's Statement would not have stacked up as prudent 'risk management' in our view
• Bank removed reference to its central CPI forecast for 2023. It also removed reference to its central unemployment rate forecast over coming months. In contrast, it reiterated its GDP forecasts for 2023 and 2024 ... The way we are reading these omissions is that a clear source of uncertainty for the RBA comes from the strong labour market and the upside risk to inflation it poses to its 2023 forecasts. For sometime the RBA has telegraphed that Australian wages growth .... remains lower than in many other advanced economies. However this was absent from today's Statement and suggests the RBA views the risks to the upside.

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We've just had data from Oz:

• Australian economic growth data: Q3 GDP +0.6% q/q (expected +0.7%, prior +0.9%)

There is not really anything in the GDP data to suggest a pause. Indeed, if you check out that post you'll see the still high level of the household saving rate. This indicates consumers still have an accumulation of financial buffers that will continue to support domestic demand well into 2023. No need for the RBA to pause just yet. The next Reserve Bank of Australia meeting is February 7.

AUD AUD The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central bank The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central bank Read this Term not doing a lot: