RBA Rate Hike Bets Hit Speed Bump in Inflation Talk

Financial markets are looking to the Reserve Bank of Australia's (RBA) decision on Tuesday as they bet on interest rates. The market is fully priced for two rate rises and implies a strong chance of a follow-up move, which would take the cash rate above 5 per cent, the highest level since the 2008 global financial crisis.

The focus now is on how tough the central bank's talk on inflation will be. Traders are trying to gauge whether growing expectations of another interest rate rise are misguided.