WEEKEND ECONOMIST: The next hike

Following this week's surprise rate hike and extraordinary jobs data, another increase in official rates is likely in November. But a December hike is unlikely as no RBA board has ever lifted rates three months in a row.

Following the RBA's announcement, markets quickly moved to price in a probability of around 60 per cent for a November move and 150 per cent for a December rise. Following Thursday's labour market data showing an extraordinary increase in employment in September of 40,600 (versus consensus of a 10,000 fall) markets are now giving a 110 per cent probability of a 25 basis point rate hike in November and 200 per cent for December – the market now sees hikes in both November and December as certainties. There is even some speculation that rates will be increased by 50 basis points in November, although this prospect is currently being given little chance by the market.

{{content.question}}

Mastercard

{{ twilioFailed ? 'SMS Code Failed to Send…' : 'An SMS verification code has been sent ...' }}

Hi {{ user.FirstName }}

Looks like you have already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to complete your SMS verification

We cannot send you a code via SMS to {{user.DayPhone}}

If you didn't receive SMS code please

SMS code cannot be sent due to: {{ twilioStatus }}

Please select one of the options below:

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device


Verify your mobile number to proceed…

Please check your mobile number below and press the Send Verification Code button. This will be used to complete your verification in the next step.

Please sign up for full access

Mastercard

Updating information

Please wait ...

Trial

Mastercard
{{ productPrice }} / day
( GST included )
Price $0
GST $0
Discount -{{productDiscount}}
TOTAL {{productPrice}}
  • Mastercard
  • Visa

Please click on the ACTIVATE button to finalise your membership

Mastercard

The email address you entered is registered with InvestSMART.

Please login or select "Don't know password"

Please untick this box when using a public or shared device


Register as a new member

(using a different email)

Related Articles