RBA's Hawkish Rhetoric Sets Tone for Markets — Market Talk

Attention in Australian financial markets will be on the Reserve Bank of Australia amid high expectations that it will raise interest rates next week. RBA Gov. Michele Bullock "firmly retired" the so-called "narrow path" rhetoric last week, says Tapas Strickland, chief market strategist at Moomoo, Australia. The narrow path emphasized protecting employment while fighting inflation. But Bullock is now pointing hard at the inflation risks, which would be deeply problematic if allowed to persist, he says. Markets now price an 87.9% chance of a rate increase next week, with another fully priced by early 2027. (james.glynn@wsj.com; @JamesGlynnWSJ)