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At its meeting today, the RBA increased the cash rate by +0.25% to 3.85%, as anticipated, and released updated forecasts. The Governor appeared slightly more hawkish than expected. However, a rapid series of rate rises still seems unlikely. Separately, it was announced overnight that the BLS's JOLTS and labour reports would be delayed by the partial government shutdown. Meanwhile, the ISM Manufacturing survey surged into expansion territory in January despite anecdotal evidence of ongoing...

A rate rise next week is still on the cards after today's Australian CPI figures. However, inflation is still likely to recede in the second half of 2026, even without an increase in the cash rate. The ABS' Consumer Price Index added +3.8% in the year to December 2025. This was slightly above the consensus forecast of +3.6% yoy, according to the Bloomberg poll. The +3.8 yoy increase was up from a +3.4% rise in the year through to November and matched the recent high recorded in October....

Heightened geopolitical tensions at Davos shaped global markets before President Trump softened rhetoric around Greenland, easing pressure on risk assets.   US growth indicators pointed to slowing momentum while Japan’s proposed fiscal expansion unsettled global bond markets. China met its annual growth target, albeit with softening consumer demand.   In Australia, unemployment was lower than anticipated, leaving markets pricing an above-even chance of a rate rise next week, ahead of this...