RBA Pricing Unwind Accelerates Amid Softer Inflation Report
Australia's inflation report for August has come in softer than expected, leading to an unwind in hawkish Reserve Bank of Australia (RBA) pricing. The modest undershoot in both headline and trimmed mean inflation has accelerated the unwind in RBA hike bets.
The implied probability for a 25 basis point hike at the RBA's next meeting on November 3 now sits at just 20%, down from 44% last week. This marks a significant shift in market sentiment following Governor Michele Bullock's press conference after the bank's interest rate decision on Tuesday.
The AUD/USD has resumed its unwind, testing key support at 0.6964 as downside momentum remains dominant. In contrast, Australia's ASX 200 index has broken higher, taking advantage of the unwind in hawkish RBA pricing.