For the Australian dollar and front-end rates, the minutes carry more weight than usual because Bullock’s post-meeting tone was softer than the decision itself. A record that leans toward holding would support pricing for a pause and could weigh on the currency, while one that keeps further tightening clearly on the table would reinforce Westpac’s call for another move by year-end. Oil is the swing factor behind both outcomes, as the board explicitly cited Middle East pressure on fuel prices, so any renewed crude strength from Gulf attacks would harden the inflation case. An upside surprise in unemployment would sharpen the market’s focus on downside risks to growth.
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Four hikes in, the question for Australia this week is whether the RBA’s resolve or its Governor’s softer words better describe where policy goes next.
Summary:
- Minutes of the RBA’s September meeting, when the cash rate rose 25 basis points to 4.60%, are due Tuesday
- CBA will be checking whether the minutes match the more dovish tone Governor Bullock struck afterwards, and says the hurdle for another hike is now higher
- Westpac still expects one more increase, taking the cash rate to 4.85% by December
- September labour force data on Thursday is expected to show unemployment steady at 4.6%, the highest since late 2021
- Westpac forecasts 20,000 new jobs, matching consensus, while CBA expects a softer 10,000 after August’s surprise 40,000 gain
- Consumer sentiment slumped after the September hike, and business conditions turned negative in August
Australia’s week centres on two releases that will shape expectations for the Reserve Bank’s next move: minutes of the September policy meeting on Tuesday and the September labour force survey on Thursday. Both are due at 11:30 am Sydney time, 00:30 GMT (8:30 pm ET the previous evening).
The RBA’s Monetary Policy Board lifted the cash rate by 25 basis points to 4.60% in September, a unanimous and widely expected decision that marked the fourth hike of the cycle. The board said inflation remained too high, pointing to domestic capacity pressures alongside global shocks from the Middle East conflict and the AI investment boom. It acknowledged that the economy was slowing and the labour market loosening, but not quickly enough to return inflation to target in a reasonable timeframe, especially with renewed pressure on oil prices.
CBA says the minutes should shed light on the arguments for holding rates steady, and it will be watching whether they match the more dovish tone Governor Michele Bullock struck at her press conference, when she noted that the four hikes would take time to flow through. CBA views the hurdle for another increase as now higher. Westpac takes a firmer line, forecasting one more hike to 4.85% by December, and says markets will look to the minutes for guidance on the outlook.
The hike has already hit households. Westpac’s consumer sentiment index fell 4.7% to 80.4 in October, near the weakest levels in the survey’s history, with confidence among those surveyed after the decision far below those polled before it.
Thursday’s jobs data follows a surprise jump of around 40,000 in August that nevertheless pushed unemployment up to 4.6%, the highest since late 2021, as participation rose to 67.1%, just below its record. Westpac forecasts a 20,000 rise in September, in line with consensus, with participation easing to 67.0% and unemployment steady at 4.6%. It says cost-of-living pressures and higher rates are drawing more people into the workforce, keeping labour supply ahead of demand.
CBA expects a smaller 10,000 gain, noting its own internal data had jobs growth closer to 20,000 a month, and also sees unemployment at 4.6%. It warns the print could be noisier than usual: a survey group with a very low jobless rate is rotating out, an upside risk, while August’s rise may have been overstated and could partly reverse. CBA cautions against reading any fall in unemployment as a change in trend, expecting the rate to drift higher as the economy slows.
Elsewhere, the NAB business survey on Tuesday follows August’s slide in conditions into negative territory for the first time in six years.
This article was written by Eamonn Sheridan at investinglive.com.