MNI RBA Review-Feb 2026: Further Tightening Likely Needed

EXECUTIVE SUMMARY: 

• The RBA raised the cash rate to 3.85%, as expected by the sell-side consensus and which was largely priced by the market (around 75% priced in per OIS markets prior to the decision). The decision was unanimous by the board. The risks appear skewed towards further action to ensure that inflation moves sustainably back into the target band of 2-3%. 
• RBA-dated OIS pricing is firmer again today across meetings, extending yesterday’s post-RBA decision sell-off.  That leaves RBA-dated OIS showing tightening across all meetings, with the probability of a 25bp hike rising from 17% for March to 105% by June and 172% by December 2026.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:RBA Review - Feb 2026.pdf