The next Reserve Bank of Australia meeting is Tuesday July 5. UBS is forecasting a rate hike of 50bp.
- The meeting after that is on August 2, UBS see a 50bp hike at this meeting too.
- Project the cash rate at 2.6% by November.
UBS says yesterday's retail sales data showed a resilient consumer:
- our view ... has been bullish/above consensus on the consumer in the near-term, but expecting a sharper weakening next year
- rate hikes will only impact household cash flow materially over coming quarters, due to a longer lag than normal reflecting a greater share of fixed home loans and larger mortgage buffers
- savings rates remain very high, and are still normalising, providing a powerful tailwind to consumption in coming months
2.30pm AEST is 0430 GMT
