As expected, the Reserve Bank of Australia (RBA), for the third consecutive time, decided to leave the cash rate target unchanged at 4.10%. This is RBA Governor Philip Lowe’s final meeting as his seven-year term ends on 17 Sep. 

Incoming RBA Governor, Michele Bullock, has said that inflation will be her first priority. Our view remains for the RBA to keep policy unchanged at the next meeting on 3 Oct, although we are penciling a chance it will hike one last time this year, taking the cash rate target to a peak of 4.35%.  

All eyes will now turn to Australia’s 2Q23 GDP report due for release on 6 Sep, where the economy is expected to grow by 0.4% q/q, 1.8% y/y. Attention will then turn to RBA Governor Philip Lowe speech on Thu (7 Sep) titled `Some Final Remarks,' just 10 days before his term expires.