RBA Hike Expected as Inflation Risks Remain Tilted to the Upside

The Reserve Bank of Australia is expected to raise interest rates by 25 basis points on September 29th, in an effort to keep inflation in check.

This decision reflects the economy's continued growth across multiple fronts, including a tight labour market and higher energy costs.

Labour market conditions remain resilient, with full-time employment growth strengthening in July and August, and three-month average job creation accelerating to 34k, the strongest pace since February.

The Australian dollar has had a rough week, hit by poor risk sentiment and the global bond selloff, but fundamentals remain strong, suggesting a higher bar for further depreciation.