Australia banks pull forward hike calls after inflation surprise
Two of Australia's big four banks expect the benchmark cash rate will rise next week and a third sees increased risk of a hike after a surprisingly strong inflation reading on Wednesday. The Commonwealth Bank of Australia said a cash rate hike was "a clear risk" but stopped short of shifting its forecast for a June hike. Westpac last week forecast a 40 bp hike in June.
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Two of Australia's big four banks expect the benchmark cash rate will rise next week and a third sees increased risk of a hike after a surprisingly strong inflation reading on Wednesday. National Australia Bank and ANZ Bank pulled forward their lift-off forecasts from June to May and expect a 15 basis point hike next Tuesday. The Commonwealth Bank of Australia said a cash rate hike was "a clear risk" but stopped short of shifting its forecast for a June hike.
Westpac last week forecast a 40 bp hike in June. Data published on Wednesday showed inflation hit a two-decade high last quarter.
Swap-market bets on a 15 bp hike firmed about even to pricing about 90% chance the benchmark cash rate is lifted from a record-low 0.1% to 0.35%.
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