Markets are reluctant to believe that the RBA will definitely not raise rates again, but they have made it clear that they do not now see a hike until at least November.
This should provide a broader outlook for investors bullish on Aussie bonds in the coming weeks and it will take some major data surprises to rattle their sentiments.
Overnight index swaps suggested a slightly less than 40% chance of a rate hike by October, however, with a 60% chance of a rate hike by November, traders believe that if policymakers were to raise rates again, it would be likely Happens in December or next February.
This situation underscores the importance of the quarterly CPI report to the RBA.
Traders expect the central bank is likely to announce a pause in rate hikes if third-quarter data due in October show another sustained cooling in inflation.
