MNI RBA Preview-Mar 2026: Pre-War Price Problem To Drive Hike

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EXECUTIVE SUMMARY: 

• Both Governor Bullock and Deputy Governor Hauser were very clear that the March meeting is “live” in that another rate hike will be discussed. Market pricing and sell-side economic consensus are now expecting a 25bp hike to 4.1% on Tuesday.
• Ahead of tomorrow’s RBA policy decision, RBA-dated OIS pricing implies a 68% probability of a 25bp hike, up from 35% in early March. The market is slightly less confident about a hike than it was ahead of February’s 25bp hike to 3.85%.
• While comments from Hauser were deemed as hawkish this week, highlighting the inflation risks from the oil price spike and limited spare capacity in the economy, he also noted that “the uncertainty over developments in Iran is extremely high”