Challenger chief economist Jonathan Karns said the RESERVE BANK OF AUSTRALIA's
chance of a November rate increase is roughly 50/50. Employment data due
Thursday and Q3 inflation due Oct. 30 will inform the decision. He said policy
risks remain skewed toward tightening and the RBA cannot tolerate another uptick
in inflation. If Q3 trimmed-mean inflation reaches 0.9%—above the prior two
quarters' 0.8%—that would prompt a rate rise, he added, and failure to act would
cast doubt on the bank's commitment to its inflation target.
