FINWIRES · TerminalLIVE
FINWIRES

RBA Now Expected to Hike Cash Rate by 25 Basis Points at September Meeting, CBA Says

By

The Reserve Bank of Australia (RBA) is expected to hike the official cash rate by 25 basis points to 4.6% at its Sept. 28 to Sept. 29 meeting, driven by a combination of higher oil prices and stronger-than-expected economic data, Commonwealth Bank of Australia (ASX:CBA) said in a report on Monday.

The lender's previous forecast was for a rate hike in November once the full quarterly consumer price index (CPI) confirmed the materialization of upside risks to inflation, its Head of Australian Economics Belinda Allen said.

However, a rate increase beyond the projected one in September is not CBA's base case at the moment, and a move to 4.85% would represent a significant shift towards prioritizing inflation risks and could produce a larger hit to economic growth and house prices. The bank continues to expect 50 basis points of interest rate cuts in 2027, with the first reduction now forecast for August 2027, rather than May 2027, followed by another in November 2027.

Brent crude oil climbed to over $100 per barrel from around $80 in recent weeks, increasing the risk of higher petrol and diesel prices impacting inflation. Recent economic data has also remained stronger than the central bank's expectations, including inflation figures and gross domestic product growth. Recent comments from senior central bank officials also focus on inflation risks.

CBA expects the upcoming labor force figures to show a steady unemployment rate.

What else is happening in International?

International

New Zealand Credit Card Spending, Balances Rise Slightly in August

Credit card spending in New Zealand rose by 0.2% month-over-month to NZ$4.46 billion in August, while credit card balances increased 0.3% to NZ$5.94 billion, data from the Reserve Bank of New Zealand showed Monday.Compared with the year-earlier period, credit card spending climbed 3.5% in August, while credit card balances declined 1.2%.Domestic billings on New Zealand-issued cards rose by 0.4% to NZ$3.93 billion in August, following a 0.9% increase in the previous month. Billings on overseas-issued cards rose month-over-month to NZ$528 million from NZ$522 million, while overseas billings on New Zealand-issued cards fell to NZ$768 million from NZ$822 million.

^NZ50
International

Rightmove: UK Residential Asking Prices Rise 0.7% MoM in September

Average newly listed asking prices in the UK increased 0.7% month over month in September, after a 2% decline in August, according to data from property portal Rightmove published Monday.The latest reading represented the first monthly price growth since May.On a yearly basis, average asking house prices in the UK were down 0.8%, after a 1% fall in the previous month.

FTSE 100
International

Real GDP Growth Forecast Accuracy Varies; Differences Rarely 'Statistically Significant,' Research Says

One forecaster generally outperformed another when evaluating the accuracy of real gross domestic product (GDP) growth expectations among forecasting organizations for individual economies, but the differences are often not "statistically significant," according to a research discussion paper released by the Reserve Bank of Australia on Monday.The researchers studied the properties of real GDP forecasts by four international organizations, comprising the International Monetary Fund, the World Bank, the European Commission and the Organization for Economic Cooperation and Development.The findings suggest that the differences may result from chance rather than indicate better forecasting ability.Conversely, the researchers found statistically significant deviations from forecast rationality for each forecaster, with common reasons including optimistic bias, excessive revisions, and extreme forecasts.

ASX 200