Central Banks

The next Reserve Bank of Australia meeting is Tuesday July 5. UBS is forecasting a rate hike of 50bp.

  • The meeting after that is on August 2, UBS see a 50bp hike at this meeting too.
  • Project the cash rate at 2.6% by November.

UBS says yesterday’s retail sales data showed a resilient consumer:

  • our view … has been bullish/above consensus on the consumer in the near-term, but expecting a sharper weakening next year
  • rate hikes will only impact household cash flow materially over coming quarters, due to a longer lag than normal reflecting a greater share of fixed home loans and larger mortgage buffers
  • savings rates remain very high, and are still normalising, providing a powerful tailwind to consumption in coming months

2.30pm AEST is 0430 GMT

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