According to Jinshi Data, Ivan Colhoun, former head of economics at the National Australia Bank, said that the market has seriously underestimated the possibility of the Reserve Bank of Australia unexpectedly raising interest rates at its policy meeting this week.
Colhoun noted that a rate hike is much more likely than a rate cut because the RBA will be closely watching the jobs market, which continues to outperform expectations and the unemployment rate remains at historically low levels.
He added that some members of the policy-setting committee may be uneasy about the persistence of core inflation and the surge in the job market.