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yesterday

Australia Inflation Cools to 3.4% in November, Trimming Near-Term Rate Hike Odds

The RBA is expected to await late‑January quarterly CPI plus jobs data before its February decision.

Australia’s inflation rate remains above the Reserve Bank of Australia’s 2 to 3 per cent target. NewsWire / Nicholas Eagar
Shoppers push trolleys full of produce at a Coles supermarket in Bondi Junction, in Sydney, Australia, October 29, 2025. REUTERS/Hollie Adams
ECB building in Frankfurt, Germany, July 21, 2022. REUTERS/Wolfgang Rattay/File Photo
People crossing at a pedestrian cross among city retail buildings

Overview

  • ABS data show headline CPI at 3.4% year on year versus forecasts near 3.7%, with monthly inflation flat and the trimmed mean easing to 3.2%.
  • Core inflation remains above the 2–3% target, with housing, rents and services still firm, while electricity was distorted by rebates and goods prices were damped by Black Friday discounts.
  • Markets put roughly a 33–40% chance on a February hike and a higher likelihood by mid‑2026, as the Australian dollar dipped on the release before steadying and bond moves proved limited.
  • Forecasts are divided, with CBA and NAB flagging a possible February rise, while ANZ and Westpac expect a hold, and Westpac says the softer print lowers near‑term tightening risk.
  • Attention now shifts to the December‑quarter CPI due January 28 and upcoming labour figures ahead of the February 2–3 RBA meeting, with the cash rate at 3.6% after three cuts in 2025.