RBA to Cement Status as Hawkish Outlier With Third Rate Hike

Australia’s central bank is set to entrench its status as a hawkish outlier with a third straight interest-rate hike, diverging from peers that are mainly sitting tight to observe fallout from the US-Iran conflict.

Economists overwhelmingly expect the Reserve Bank will raise the cash rate to 4.35% on Tuesday, unwinding all of last year’s cuts. Money market pricing for tightening also stands at about 80% after first-quarter inflation held well above the top of the 2-3% target band, driven in part by fuel costs from Middle East supply disruptions.