Markets at lunchtime after the inflation numbers are now forecasting a 70% chance of a rise next week, along with the A$ now trading around 70c to the USD.

Last week, market expectations of a rate rise at the next RBA meeting went from 25% in mid January, to 60% by the end of last week - see the chart below:

With inflation numbers out this morning, whilst the headline number of 3.8% is high, the RBA prefers to look at the ‘trimmed mean’, of 3.3%, which is ever so slightly above what the market was looking for.

As a result, markets are now forecasting a 70% chance of a rise next week, along with the A$ now trading around 70c.

(The largest contributor to inflation was housing at 5.5%, any first home buyer looking to buy now with the new 5% scheme will attest to that).

Get in touch if you would like to discuss what this means for you at [email protected] or call me 0403397060

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