Last week, we saw monetary policy decisions in the US, UK and Japan. Only the Bank of England raised interest rates but it was clear that the US Federal Reserve is by far the most confident of the major central banks and is expected to raise rates at their next meeting. The RBA meets this week but is almost certain to leave rates unchanged once again.
Financial markets continued to push out the timing of the first RBA rate hike with the lower than expected June quarter CPI data supporting this view with market pricing suggesting that the RBA will likely sit pat until the end of next year, when the first tightening since the end of 2010 is expected. A full 25 basis point RBA rate hike is not fully priced in till April 2020.