Bond traders are more confident that the Reserve bank is nearing the end of its aggressive rate cycle, but economists aren’t so certain.
Bond traders were more confident on Monday that the Reserve Bank was at or near the end of its aggressive cycle of interest rate rises as yields dipped ahead of Tuesday’s crucial monetary policy meeting.
. That compares to a 54 per cent chance before last week’s inflation data softened more than expected in the June quarter. HSBC’s chief economist in Australia, Paul Bloxham, also expects the central bank to raise rates once more. The economist noted that last week’s inflation surprise was modest, with the RBA’s preferred measure of core inflation – the trimmed mean – slowing to 5.9 per cent from 6.6 per cent, which was slightly softer than the market’s and the RBA’s expectation of 6 per cent.
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