The RBA Monetary Policy Board raised the cash rate by 25bps to 4.10% today but it was a split vote of 5 members in favour and 4 opting for no change.
The last back-to-back rate hikes were in May/June 2023.
Markets initially interpreted the hike dovishly, with Aussie 3-year bond yields falling and AUD/USD depreciating a little.
Market pricing implied roughly a two-thirds chance of a hike today and most market economists flipped to a hike after Deputy Governor Hauser’s hawkish interview last week (see Don’t bet against the Hauser).
We were a bit more circumspect, noting clear arguments to hike (on domestic macro fundamentals) or hold (on conflict-related uncertainty).
