RBA Hike Odds Rise as Australia's Q2 Growth Slows

Australia's economy saw its growth slow down in the second quarter but remained above the Reserve Bank of Australia (RBA) target, leaving investors to bet on another interest rate hike.

The RBA's target for growth without adding to inflation pressure is around 2%, and Australia's annual growth slowed to 2.1% in Q2, just above this threshold. Household spending contributed positively, with a jump in vehicle purchases, while business investment fell after a burst of big-ticket equipment purchases.

Inflation remains above the RBA's target range of 2%-3%, and money markets have increased the odds of a September rate hike to 57% from 48%. They also believe a move by November is more likely than not.