Reserve Bank faces market scrutiny as inflation data and Senate hearing converge

On the day the Australian Bureau of Statistics releases September-quarter inflation numbers, Governor Michele Bullock and other Reserve Bank officials are scheduled to appear before a Senate estimates committee. The trimmed-mean measure, the bank’s preferred gauge of underlying price pressures, is anticipated to show an increase, prompting markets to assess the likelihood of a November rate hike. Deputy governor Andrew Hauser recently warned that the inflation outlook appears materially worse, a remark that has already pushed market odds for a hike above 50 per cent.

Some analysts argue the upcoming data may be moot because the board’s decision path is already set, while others note that softer jobs data have tempered earlier expectations. Reserve Bank chief economist Sarah Hunter will discuss the outlook in a televised interview, and assistant governor Brad Jones will speak at the AFR Super and Wealth Summit, though his remarks are likely to focus on card-surcharging policy rather than monetary policy. Meanwhile, Australian equity futures edged higher and the ASX200 finished the week largely flat.