A Commerzbank strategist said the risk backdrop has shifted, arguing that market pricing for another Reserve Bank of Australia (RBA) rate hike this year no longer reflects the balance of risks.
According to Jin10, Commerzbank strategist Volkmar Baur said markets were pricing only a 50% chance of another RBA hike this year, a view he said he did not agree with.
Baur said energy-related upside risks were fading while downside risks linked to falling property prices were becoming more visible. He said inflation would need to rise sharply to prompt the RBA to tighten policy again, and he expected that scenario would not occur.
He added that recent risk discussions had focused on Iran’s ongoing conflict and the possibility of elevated fossil-fuel prices. However, he said oil prices had continued to fall since the RBA’s last meeting, meaning that risk was not currently present.
On the downside, Baur highlighted the possibility of a significant decline in property prices, which he said could weigh on consumer spending and slow the economy. He said the latest data suggested this dynamic might be starting to take shape.
Baur said the overall risk landscape appeared to be changing and reiterated that only a sharp rise in inflation would lead the RBA to raise rates again this year, which he did not expect to happen.
Commerzbank Says Market Bets on Another RBA Rate Hike This Year Are Outdated
2026-07-02 07:29:59
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