Breaking Market Wire, Asia Pacific

After sitting on its hands since delivering a rate rise in early-June, the RBA has seen enough to think that its policy settings weren’t ‘restrictive’ enough to get inflation back down to the 2-3% target band in the desired time. At today’s meeting the RBA Board, under the stewardship of new Governor Bullock, raised interest rates by another 25bps. This has taken the cash rate up to 4.35%, its highest level since November 2011. Today’s move has taken the cumulative tightening delivered to 425bps, by far the most abrupt RBA hiking cycle in several decades. According to the RBA, inflation...

In what was Governor Lowe’s last meeting at the helm the RBA kept the cash rate steady at 4.1% for the 3rd straight month. This wasn’t a surprise with the recent wave of weaker activity data, slowing inflation, and sluggish growth in China supporting the case for the RBA to stand pat as the full effects of its past moves continue to work their way through the economy. According to the RBA the tighter policy is “working to establish a more sustainable balance between supply and demand in the economy”, and the decision to hold fire again in September “will...