MNI RBA Preview-August 2026: Hold, Price Pressures Persist

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EXECUTIVE SUMMARY: 

• The RBA announces its decision Tuesday 11 August and is likely to keep rates at 4.35% with a unanimous vote for the second consecutive meeting following lower-than-expected Q2 underlying inflation, tightening of financial conditions and easing in demand growth as expected. 
• The decision is still likely to be a hawkish hold given underlying inflation remains well above the top of the 2-3% target band, persistent capacity pressures, uncertainty continues to be elevated and retail fuel prices are up again.
• Given that Bullock said the economy has developed “broadly as expected”, forecast revisions included this month are likely to be moderate and concentrated in the near-term.
• RBA-dated OIS pricing points to modest tightening across all meetings, with the probability of a 25bp hike rising from 6% at tomorrow’s meeting to 65% by December 2026.