RBA Hike Odds Nearly Tripled in a Week: 22% to 60% Before the CPI Print
A week ago, the ASX futures market gave a 3 November RBA rate hike a little under a one-in-four chance. As of today's settlement it's a coin flip that lands on "hike" six times out of ten. Nothing about the RBA's November meeting changed in between — what changed was what the market thinks it knows about inflation.
Here is the day-by-day record of how that repricing actually happened, taken from our own archived snapshots of ASX 30-day interbank cash rate futures.
The week in one chart
Each point is one ASX settlement. The market moves once a day on this measure, after the close — so these are steps, not a continuous line.
| Settlement | Hike probability | Implied rate | Day-on-day change |
|---|---|---|---|
| Thu 15 Oct | 15.6% | 4.639% | — |
| Fri 16 Oct | 17.6% | 4.644% | +2.0 pts |
| Mon 19 Oct | 22.4% | 4.656% | +4.8 pts |
| Tue 20 Oct | 22.4% | 4.656% | unchanged |
| Wed 21 Oct | 51.2% | 4.728% | +28.8 pts |
| Thu 22 Oct | 62.4% | 4.756% | +11.2 pts |
| Fri 23 Oct | 55.6% | 4.739% | −6.8 pts |
| Mon 26 Oct | 62.4% | 4.756% | +6.8 pts |
| Tue 27 Oct | 60.0% | 4.750% | −2.4 pts |
Wednesday 21 October: the day it flipped
For four straight sessions the number sat still. Hike odds closed at 22.4% on both Monday 19 and Tuesday 20 October, and the implied rate didn't budge from 4.656%. Then on Wednesday it went to 51.2% in a single settlement — a 28.8-point jump, and far and away the largest one-day repricing of the month.
The catalyst is not ambiguous. That morning, RBA Deputy Governor Andrew Hauser said the inflation outlook was "materially worse" than the bank had forecast. It was picked up within the hour by Bloomberg, the Wall Street Journal, Reuters, the ABC, the AFR and the Guardian, whose headline put it plainly: the odds of a fifth hike this year were "likely to shorten".
What makes the move notable is what it had to overcome. Only the day before, the running story was the opposite one — a soft jobs report had coverage declaring another "nail in the coffin for RBA hikes", and hike bets were being trimmed, not raised. One set of remarks from the deputy governor erased that and then some.
The back half: consolidation, not retreat
Thursday 22 October pushed it further, to 62.4% — the high-water mark for the month. Friday gave some back to 55.6%, Monday recovered the lot to 62.4%, and today's settlement eased to 60.0%.
It would be easy to read Friday's 6.8-point drop as the market having second thoughts. The more defensible reading is that since Thursday, hike odds have traded in a narrow 55.6% to 62.4% band — roughly 7 points wide — and have not once gone back near where they started the week. The repricing stuck. What's happening now is positioning, not reconsideration.
What 60% actually means for the cash rate
The implied cash rate after the November meeting is 4.75%, against a current target of 4.60%. That's a gap of 15 basis points — which is not a prediction that the RBA will move rates by 15 basis points. The RBA moves in quarter-point steps or not at all. A 15bp implied gap is the market's way of saying "about 60% of one 25bp hike", which is why our homepage now reports the Expected Move as a clean +0.25% step rather than the raw implied figure.
Worth noting what the rest of the curve is not doing. December sits at just 18.0% for a further hike, February at 19.2%, March at 19.6%. The market has priced one hike in November, not the start of a rapid series. For why a run of modest-looking per-meeting numbers can still add up to something decisive, see our explainer on marginal vs cumulative probability.
Wednesday's CPI decides it
All of this is a warm-up. The ABS publishes the September-quarter CPI on Wednesday 28 October at 11:30am AEDT — tomorrow, and six days before the board meets on Tuesday 3 November.
Previews circulating this week have banks looking for a core (trimmed mean) rise of around 1.0% for the quarter, against the RBA's own 0.8% forecast. If that's roughly where it lands, it corroborates exactly what Hauser flagged, and 60% is likely to look low in hindsight. A print at or below 0.8% does the opposite, and would leave the market holding a hike it priced on a warning rather than on data.
Either way, expect the single largest move of this entire cycle to land in Wednesday's settlement. A week of 2-to-28-point daily steps is about to be resolved by one number.