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RBA minutes will explain latest rate hike

Speeches by senior Reserve Bank staff and detailed labour force statistics are likely to be highlights of a week broken up by the national day of mourning.

September 18, 2022
By Poppy Johnston
18 September 2022

Minutes from the Reserve Bank of Australia’s board meeting will be watched closely, with analysts on the lookout for more clues regarding future rate hikes.

The minutes, due on Tuesday, will provide some context for the fifth consecutive rate hike that was announced by the central bank on September 6.

The RBA came under scrutiny last week, with governor Philip Lowe and senior staff grilled by a parliamentary committee about its aggressive rate hiking strategy.

During the hearing, Lowe said the board would likely be choosing between a 25 basis point increase or 50 basis points at the next rate decision in October.

Reserve Bank of Australia Governor Philip Lowe. (Lisa Maree Williams/Getty)

RBA officials will also deliver speeches this week, with head of domestic markets Jonathan Kearns due to speak at the AFR’s Property Summit on Monday and deputy governor Michele Bullock to speak at a Bloomberg event on Wednesday.

Elsewhere, consumer confidence from ANZ and Roy Morgan is expected on Tuesday.

CommSec economist Ryan Felsman said the latest jobs data – which showed unemployment lifting slightly to 3.5 per cent – would likely be reflected in the scores.

On Wednesday, the Australian Bureau of Statistics will release its detailed labour force statistics and population figures.

Holiday adjustment

The ABS shifted its Thursday data drops to Wednesday to account for the public holiday announced to mourn the Queen.

Felsman expects to see a pick up in overseas and interstate migration at the beginning of 2022 due to reopened borders.

At the end of the week, S&P Global will issue its preliminary September purchasing managers’ indexes for the manufacturing and services sector, which will provide insights into the effect of rising interest rates and cost pressures on business activity.

With the local market likely to follow suit, Wall Street’s major indexes closed lower on Friday while US Treasury prices climbed as investors’ fears about the prospects for a global recession intensified.

They also prepared for a massive interest rate hike from the Federal Reserve.

The Dow Jones Industrial Average fell 139.4 points, or 0.45 per cent, to 30,822.42; the S&P 500 lost 28.02 points, or 0.72 per cent, to 3,873.33; and the Nasdaq Composite dropped 103.95 points, or 0.9 per cent, to 11,448.40.

Australian futures fell 2.000 points, 0.03 per cent, to 14,823.

The benchmark S&P/ASX200 index closed down 103.8 points, or 1.5 per cent on Friday to an eight-day low of 6739.1.

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