RBA didn't discuss rate hike this time

Briefly in today's #5in5withANZ podcast below:

The Reserve Bank of Australia didn’t consider a hike as it held rates yesterday. Aussie consumer confidence jumps to its highest since January 2023, and August inflation data later today should show the temporary impact of cost of living support. The NZ dollar hits a new 2024 high.

5 things to know in 5 minutes:

1. The Reserve Bank of Australia held its cash rate at 4.35%. ANZ Head of Australian Economics Adam Boyton says the fact a rate hike wasn’t discussed means August’s tightening bias was not as strong yesterday. The Australian dollar traded up overnight, while the NZ dollar hit a new 2024 high as the US dollar weakened on rising bets the Fed would cut by another 75bps of cuts this year.
2. Adam says the RBA made it clear it was still in no rush to cut. ANZ Research continues to expect the RBA will commence rate cuts from February next year.
3. Attention in Australia today turns to the August partial inflation indicator. ANZ Senior Economist Catherine Birch is expecting a fall from 3.5% in July to 2.7% - the first time it would be in the RBA’s 2%-to-3% target band since October 2021.
4. Adam says the RBA Board made a point yesterday that while headline inflation will decline for a time, it was focused on underlying inflation, which remains too high.
5. The RBA warned the jobs market remains tight despite some easing, and that household consumption is expected to pick up. That comes as ANZ Roy Morgan Consumer Confidence last week hit its highest level since January 2023.

In our bonus deep dive interview:

ANZ Chief Economist for Greater China Raymond Yeung 楊宇霆 analyses yesterday’s China stimulus package and explains why it could have been bigger.

Cheers

Bernard

PS: Catch you tomorrow with more on China’s stimulus package and reaction to Australia’s August inflation data.