Rate Rise Timing

The NAB has moved forward it's expectations for the next rate hike to the RBA's next board meeting on October 5. This is prior to the Oct 28 CPI release and ahead of most expectations for a November move. They state that:

"With some recent abatement in global economic concerns, RBA Governor Glenn Stevens signalled in a speech on Monday that the Board were strengtheningtheir focus on the upside risks to inflation. His sentiment that ‘the task ahead is likely to be one of managing a fairly robust upswing’ reiterated RBA communication following the September 7 Board meeting that higher interest rates would be required at some point in the period ahead.

The tone of recent RBA language has echoed that published after the September 2009 and February 2010 meetings, both occasions that were immediately followed by a 25 basis point rise in the cash rate."

Their long term forecast of 5.50% by the end of 2011 remains unchanged.