RBA’s Hawkish Stance Spurs Traders to Boost Bets on August Hike
- Bond market assessed meeting, presser as most hawkish in year
- Traders are now pricing a 20% chance of a rate hike on Aug. 6
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Australia’s central bank put the world on alert that it may buck global trends by raising interest rates again, with policymakers delivering what the bond market judged to be the most hawkish shock in a year.
Money markets flipped to pricing a 20% chance the Reserve Bank will raise rates at its next meeting in August after Governor Michele Bullock said persistent inflation meant the board considered a hike, before deciding to keep borrowing costs unchanged on Tuesday. Prior to the decision, traders were barely pricing any chance of a rate rise.