If you've seen a headline like “markets are pricing a 24% chance of an RBA hike,” that number almost always traces back to the ASX RBA Rate Tracker. It converts the price of ASX 30-day interbank cash rate futures into a probability of the RBA changing the cash rate at its next meeting. Here's exactly how it works — and how to read it.

What the ASX RBA Rate Tracker is

The tracker is a market monitor for official cash rate expectations. Because it's built from traded futures prices rather than opinion, it reflects what participants are actually willing to put money behind. It's updated at the end of each ASX trading day.

The data: 30-day interbank cash rate futures

Each contract covers a calendar month and is quoted as 100 minus the expected average cash rate for that month. So a November contract trading at 95.35 implies an average cash rate of 4.65% (100 − 95.35). Settlement is against the actual RBA overnight cash rate, tying it directly to RBA policy.

The formula

Because the RBA meeting happens partway through the month, ASX weights the month by the days before and after the announcement:

where X is the futures-implied yield, r_t the current cash rate, r_(t+1) the rate after a 25 bp move, p the probability of that move, and n_b / n_a the fraction of the month before / after the meeting. Solving for p gives the implied probability.

A worked example

Say the cash rate is 4.60%, the November contract implies 4.655%, and the meeting falls on the 3rd of a 30-day month (so 27 of 30 days are “after” the meeting, i.e. n_a = 0.9). Then:

So the market is pricing roughly a one-in-four chance of a 25 bp hike at that meeting.

The one big limitation — and how RBA Watch extends it

ASX's own tracker publishes the probability for the next meeting only, plus the raw implied-yield curve. It doesn't translate that into a clean, meeting-by-meeting expected rate for every future meeting — and naive attempts to do so break down for meetings that fall late in a month (where the “after” fraction shrinks and amplifies noise).

RBA Watch uses the same ASX methodology but extends it across every upcoming meeting, with a stabilisation for late-month meetings so the forward curve stays clean. The full method is documented on our methodology page.

There's a second, subtler limitation worth knowing about: this per-meeting probability is marginal — it only measures the new information added at that specific meeting, not the cumulative chance of a move having happened by then. See marginal vs cumulative RBA hike probability for why that distinction matters.