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December RBA preview: no move expected at the final meeting of 2023

By Kyle Rodda

14:47, 4 December 2023

What is the market pricing for this RBA meeting?

Interest rate markets are implying a negligible chance of a rate hike at the final RBA meeting for 2023. According to the ASX’s RBA Rate Indicator, there is a 2% chance of a lift in the cash rate, with a 98% implied probability the cash rate remains at 4.35%.

Source: ASX
Past Performance is not a reliable indicator of future results.

The odds of a rate hike fell following last week’s monthly CPI indicator. It revealed headline price growth moderated to 4.9% in October, falling to its lowest level since the beginning of 2022. The more critical trimmed mean figure, which strips out more volatile items, is falling more slowly; the latest data suggests it rose by 5.3% last month, dipping from 5.4% in September.

Source: Trading Economics

Economic data paints a mixed picture for the broader Australian economy. The labour market is weakening slightly; however, the unemployment rate remains near 50-year lows at 3.7%, with October’s labour force data revealing a much larger than expected 55,000 jobs added to the economy. Meanwhile, Retail Sales surprisingly contracted by 0.2% for the month, possibly signalling weaker household consumption – although it could be due to deferred spending ahead of the November discounting season.

BTC/USD

51,222.20 Price
-0.930% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

US100

17,989.00 Price
+0.090% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 22:00 (UTC)
Spread 1.8

Oil - Crude

78.07 Price
-0.310% 1D Chg, %
Long position overnight fee 0.0161%
Short position overnight fee -0.0380%
Overnight fee time 22:00 (UTC)
Spread 0.040

XRP/USD

0.54 Price
-1.500% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

The RBA’s meeting arrives one day before the September National Accounts, which is forecast to reveal a fall in the GDP growth rate for the quarter to 1.7% y/y, according to a survey of economists conducted by Reuters.

Technical analysis: AUD/USD

Expectations for rate cuts from the US Federal Reserve have weakened the US Dollar and pushed the AUD/USD to four-month highs. The pair is approaching a critical technical level at long-term downward sloping trend-line resistance.

Past performance is not a reliable indicator of future results.

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