PM 29 Sep 26: RBA hikes, more ahead?
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What is the main topic discussed in this episode?
A listener production.
How did investors react to the RBA's decision to hike rates on Tuesday?
And is another rate hike on the table this year? Good
afternoon, I'm Steve Daglian. I'm
Laura
Besseraci. It's Tuesday, the 29th of September. Welcome to the Comsec Market Update.
How did the ASX react to the RBA's September rate hike?
Well, Stevie, it seems like the market enjoyed the fact that we got a rate hike today. In fact, uh, the market lifted. Not directly after the decision was handed down. We actually fell as that decision was being handed down, but after Michelle Bullock started talking, our market lifted and we're close to our best level of the day. That being said, we are up only by roughly a third of one percent.
It is the penultimate uh day of the month and also quarter as well, which of course wraps up tomorrow. But uh but you're right, the market is a little higher today by around a third of a percent after lifting yesterday as well. We're completely flat basically for most of the session, which is uh to be expected. There was a lot of caution heading into this decision, and of course, there are still a number of things to be watching for as well in the coming days. Well, we should probably start with the RB. Decision and have a quick uh chat about that because obviously that was the highlight of the day.
Why did the RBA raise rates to a 15-year high?
Today. We did see the RBA raising rates by a quarter of a percent or twenty five basis points to four point six percent. That is uh makes it the fourth hike of twenty twenty six. It's means that the cash rate is the highest it's been in fifteen years as well, and it's the first rate hike since May. It was also a unanimous decision. Um essentially all members that vote on this were the board, thought it was the Best idea to lift rates today again.
That's right. And of course, this decision was widely expected. So anything except for a rate hike would have been a surprise today. Now, the board, we heard from Michelle Bullock, and she said that the board did actually consider the case for leaving rates exactly where they are or hiking interest rates. But of course, the case to hike was stronger. Now, looking to the minutes, they said the board will continue to do what is necessary to. Bring inflation sustainably back to target, including increasing the cash rate further if needed. Now, we did listen to uh Michelle Bullock's uh press conference, which went on for about 40 minutes or so. Um, she highlighted uh a number of topics, but she did say today's rate hike was needed to slow the economy.
And she also said that uh the board is hoping it will be enough to bring inflation down. We We think financial conditions will be restrictive enough after four rate hikes.
Will the RBA hike rates again in November?
Of course, we are still waiting to see the lagged effects of the other three rate hikes that we got earlier this year.
Yeah, and we're five weeks out now from the next interest rate decision, which is on Melbourne Cup Day, as it always is. Earlier the market thought it was basically a coin flip, whether or not we'll get a uh a rate hike in November. And while the governor was speaking, interestingly, the market pricing seemed to jump up a bit to around a seventy percent uh chance of a lift. But ultimately, really, it's going to be data dependent. So things like inflation data, which will be out tomorrow, the US Iran war, healthy. Things unfold in the the coming weeks will be important. Basically, the longer the uh conflict lingers, the the more likely rate hikes will be as well, partly because it keeps oil prices elevated and raises inflation concerns.
How are AI investment and sector performance shaping the ASX?
We've got an unemployment uh report as well in mid-October, and then the all important quarterly inflation data out in late October as well.
Yeah, so that'll be a few days ahead of the November meeting, which is going to be super important because the quarterly inflation number is the one they watch most closely. I should also mention that they did flag that AI demand is adding to price pressures. They said growth in Australia's major trading partners has been stronger than expected, as the boost from AI related investment has outweighed the adverse effects of the Middle East conflict.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:02–0:24
2
How did the ASX react to the RBA's September rate hike?
0:24–1:16
3
Why did the RBA raise rates to a 15-year high?
1:16–2:34
4
Will the RBA hike rates again in November?
2:34–3:16
5
How are AI investment and sector performance shaping the ASX?
3:16–4:39
6
How did higher interest rates affect Australian household spending?
4:39–5:25
7
Which ASX stocks gained and lost the most, and why?
5:25–7:57
8
What do Australia's August inflation figures mean for the next RBA decision?
7:57–9:24