Westpac expects the RBA to keep the cash rate at 4.35% in August after Q2
headline and trimmed-mean CPI printed below forecasts, a call consistent with
Commonwealth Bank of Australia. Westpac says the RBA board will remain hawkish.
Both banks note pass-through from Middle East-related energy costs to consumer
prices has not persisted in recent months; June inflation showed higher input
costs did not broadly reach consumers. They expect the RBA to retain hawkish
wording even if it holds rates, so a mere pause may have limited impact on the
AUD — market focus will be whether the board shifts clearly dovish or keeps a
cautious tone.
