**As seen in Risk In The Week report 12/01/23, subscribe at cablefxm.co.uk/reports
The RBA lifted its Cash Rate target by 25bps to 4.35% in November, this amounted to a net 425bps of policy tightening during this cycle. Economists' expectations were delivered after the central bank had paused rate hikes since June. The board said that further increments might still be needed but the move will depend on data. Also, the central bank flagged risks that inflation could stay higher for longer. Market participants expect the RBA to leave policy unchanged during its last meeting of the year, the board is not scheduled to decide on monetary policy again until early February. Recent data showed a resilient labour market as the headline net jobs figure rose by 55K in October, this topped expectations of 24K. On the other hand, the monthly CPI print surprised economists as it dropped from 5.6% to 4.9% Y/y, the median survey expected 5.2%. Progress from the inflation front translated into lower expectations of RBA tightening, Cash Rate futures imply only 7bps of tightening by May vs 15bps preceding CPI data.
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