Australian CPI jumps, as do RBA rate hike bets and the Australian dollar. Read from the bottom up for the chronology:


Q3 inflation data from Australia was the focus going into the session. The data showed stronger than expected CPI growth, the q/q for each of the three main measures came in above Q2 and higher than expectations (see bullets above). While y/y rates fell the key is the q/q rising so strongly. In addition, inflation is still sitting above the Reserve Bank of Australia's forecasts. New RBA Gov. Bullock has expressed more hawkishness than previous Gov. Low and said less than 24 hours ago that the RBA will hike again if there is a material upward revision to its inflation forecasts. Stir in a still strong employment market, with unemployment not too far from 50-year lows and the result is very, very likely to be a rate hike from the Bank at its next meeting, on November 7. When I say ‘very, very likely', you can read that as ‘lock it in’. I expect a 25bp rate hike.

As I post two (ANZ & CBA) of the ‘big four’ Australian banks have already revised their forecasts to tip a November rate hike. One of the others (NAB) was already forecasting this. I’m sure Westpac will be the same but I haven't seen a note just yet.

AUD/USD jumped after the release of the data, hitting a high of circa 0.6400. Its dribbled back to under 0.6385 as I post. NZD/USD followed a similar pattern. Movement across major FX rates otherwise has been dull.

There is not a lot of movement to report on oil or gold. BTC jumped early in the session but has sat around $34K since.

Chinese stocks gained, helped by stimulus announcements earlier this week. Hong Kong reduced its home-buying tax, helping further.

Asian equity markets:

  • Japan’s Nikkei 225 +1.3%

  • China’s Shanghai Composite +0.5%

  • Hong Kong’s Hang Seng +1.5%

  • South Korea’s KOSPI -0.5%

  • Australia’s S&P/ASX 200 -0.02%

aud cpi rba November hike wrap chart 25 October 2023 22