Lee Sue Ann, economist at UOB Group, suggests that the RBA could keep the OCR unchanged at its September meeting.
Key comments
Australia’s seasonally adjusted unemployment rate rose to 3.7% in July, from 3.5% in June, a sign that the labor market may be at a turning point. On the other hand, wages disappointed again: the wage price index (IPS) rose 0.8% quarter-on-quarter in the second quarter of 2023, compared to the 0.9% forecast by consensus. In annual terms, wage growth slowed to 3.6%, from 3.7% in the first quarter of 2023, the highest level of the decade.
The RBA has kept rates unchanged for two consecutive months and after the data set, we believe that he will keep monetary policy unchanged at his next two meetings, on September 5 and October 3unless we have upward inflation surprises with the CPI data for July, on August 30, and the CPI for August, on September 27.
However, we believe there is a possibility of a final hike this year, targeting the spot rate at a maximum of 4.35%. In scheduling terms, this is likely to happen at the November 7 meeting, following the Q3 2023 CPI release on October 25.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
