RBA Retains Hawkish Bias on Inflation Risks, AUDUSD Data-Dependent

Westpac analysis on July 1 shows the RBA remains focused on excess demand and persistent inflation after its June pause. The board held the cash rate at 4.35% on June 29 with a unanimous decision and explicit tightening bias, then confirmed in June 30 minutes its readiness to hike if pressures continue. Markets have since priced only 10 bps of tightening by year-end and 17 bps of easing by 2027 after Brent crude fell 10% and Sydney-Melbourne home prices weakened. The next key trigger is the June-quarter CPI release on July 29 ahead of the August 10-11 meeting.