Up until recently, I had been leaning towards the RBA repeating a second 25bp hike tomorrow and potentially even pausing in December (data depending…). Yet last week’s strong inflation report puts another fly in the ointment. On one hand, Governor Lowe has said the RBA tend to forecast their policy on inflation expectations – which remain well anchored. On other hand, if October’s debate for 25 or 50bp was ‘finally balanced’ then it poses the question as to whether the strong inflation report tips the scale towards a 50bp hike. Furthermore, producer prices also rose to a record high. {chart} I think it is a closer ... (full story)