Oil Spike Sends Aussie Stocks Plunging Amid Rising RBA Hike Odds
Australia's S&P/ASX 200 index dropped 1.4% to a six-week low, as oil prices surged above $100 a barrel following renewed attacks on ships in the Middle East.
The spike in oil prices has raised concerns about supply disruptions and inflation, with traders now pricing in a higher chance of the Reserve Bank of Australia (RBA) increasing its cash rate later this month. According to Reuters-cited market pricing, there is a 77.3% chance of a quarter-point move.
The RBA's potential rate hike has already started affecting the mortgage market, with lenders beginning to act on the expectation of higher policy rates. This can lead to tighter credit conditions before the central bank even meets, making it harder for borrowers to qualify for new mortgages or refinance existing ones.