RBA Eyes Another Rate Hike as Economic Growth Data Looms

The Reserve Bank of Australia is poised to consider another interest rate hike as it awaits economic growth data. The Australian Bureau of Statistics will release national accounts figures on Wednesday, which will be closely watched by the RBA. Westpac senior economist Pat Bustamante expects GDP growth to slow to 0.2 per cent for the June quarter, but notes that the economy has been showing signs of resilience due to investment in data centres, renewable energy, and home building.

Bustamante says growth remains stuck in the slow lane, but stabilising rather than weakening further. He also expects the annual rate to slow to 1.7 per cent year-on-year. Household spending grew at the fastest rate since the series began in 2023 in July, according to data released on Thursday.

Meanwhile, central banks in New Zealand and Canada are meeting to decide interest rates. Markets are pricing in a second straight Reserve Bank of New Zealand rate hike, lifting the official cash rate to 2.75 per cent. Wall Street investors are taking caution after Federal Reserve chair Kevin Warsh reiterated the central bank's focus on fighting inflation.