Australian Consumer Inflation Expectations Hit Highest Since May, Raising RBA Hike Risk

what happened

A survey by ANZ Bank and Roy Morgan, reported by Market Talk, found that Australian consumer inflation expectations rose above 6.0% on a yearly basis. That is the highest level since May. The survey was published a day before the release of quarterly inflation data for the third quarter of 2026.

The figures back up the Reserve Bank of Australia's biggest concern, namely that rising inflation expectations are becoming a serious problem. The central bank has already said it is running out of patience with overheating prices. According to Market Talk, a rise of 1.0% or more in core inflation on a quarterly basis in the third quarter would likely confirm a fifth rate hike this year.

why it matters

For markets this is a signal that expectations of further monetary tightening are strengthening. Such a outlook typically supports Australian government bond yields and the Australian dollar, but puts pressure on rate-sensitive stocks. The quarterly inflation data due in the coming days remains the key factor.

market impact

AUD and Australian government bonds: expectations of further RBA hikes support yields and weigh on equities

tags

instruments