> **来源：[研报客](https://pc.yanbaoke.cn)** # Persistently high inflation leads to RBA rate hike # INFLATION REMAINS ABOVE TARGET The ABS's December monthly CPI data came in above expectations, with annual headline inflation rising $3.8\%$ and trimmed mean inflation up $3.3\%$ . Services inflation remains sticky and rents and new dwelling purchases are accelerating which will increase the RBA's concerns. The release also contained Q4 annual trimmed mean inflation data which the RBA focuses on during this transition to monthly CPI. This came is at $3.4\%$ , which was above the RBA's November forecast of $3.2\%$ . # RBA HIKES INTEREST RATES Elevated Q4 inflation, combined with a tightening of the labour market in December, led the RBA into 25bps rate hike in February. In their decision, the RBA noted that private demand had strengthened substantially more than expected while supply capacity remains limited. Bond yields have also risen to $4.8\%$ and is expected to remain around this level for the remainder of the year. # AUD STRENGTHENS SIGNIFICANTLY The AUD appreciated substantially in February to above US$0.70 for the first time since February 2023. This was largely driven by a sharp fall in the USD, down 10% over the past year against a basket of other currencies, as traders cited concerns over volatility and uncertainty in US economic, domestic and trade policy. The shift in expectations towards rate hikes in Australia has also contributed, with a larger interest rate differential between Australia and the US increasing demand for – and therefore placing upward pressure on – the AUD. # Goods drive rise in inflation Annual growth for goods and services inflation $(\%)$ # RBA hikes interest rates in February Historical and forecast cash rate and 10-year bond yields $(\%)$ Source: Knight Frank Research, Macrobond, ASX, NAB # Weakening USD supports rising AUD AUD vs USD (LHS) and DXY US dollar index(RHS) Source: Knight Frank Research, Macrobond Australia key forecasts <table><tr><td></td><td>Real GDP growth (Q3 2025, y/y %)</td><td>Unemployment rate (December 2025, %)</td><td>Core CPI inflation (December 2025, y/y %)</td><td>Cash rate target (3 February 2025, %)</td><td>10-year bond yield (30 January 2026, %)</td></tr><tr><td>Latest</td><td>2.1</td><td>4.1</td><td>3.2</td><td>3.85</td><td>4.8</td></tr><tr><td>Year-end 2026 (f)</td><td>2.5*</td><td>4.5*</td><td>2.7*</td><td>4.1^</td><td>5.0^</td></tr></table> # Business indicators Higher interest rate expectations weigh on business confidence and forward orders PMIs rise in January Composite PMI Output Index (above 50 indicates expansion) Source: Knight Frank Research, Macrobond <table><tr><td></td><td>Latest Jan-26</td><td>Last quarter Oct-25</td><td>Jul-25</td><td>Apr-25</td><td>1 year ago Jan-25</td></tr><tr><td>Australia</td><td>55.5</td><td>52.1</td><td>53.8</td><td>51.0</td><td>51.1</td></tr><tr><td>China</td><td>0.0</td><td>51.8</td><td>50.8</td><td>51.1</td><td>51.1</td></tr><tr><td>Euro Area</td><td>51.5</td><td>52.5</td><td>50.9</td><td>50.4</td><td>50.2</td></tr><tr><td>Japan</td><td>52.8</td><td>51.5</td><td>51.6</td><td>51.2</td><td>51.1</td></tr><tr><td>UK</td><td>53.9</td><td>52.2</td><td>51.5</td><td>48.5</td><td>50.6</td></tr><tr><td>US</td><td>52.8</td><td>54.6</td><td>55.1</td><td>50.6</td><td>52.7</td></tr></table> Unemployment rate falls Unemployment rate (trend adjusted) Source: Knight Frank Research, Macrobond <table><tr><td></td><td>Dec-25</td><td>Sep-25</td><td>Jun-25</td><td>Mar-25</td><td>Dec-24</td></tr><tr><td>Australia</td><td>4.2</td><td>4.3</td><td>4.2</td><td>4.1</td><td>4.0</td></tr><tr><td>NSW</td><td>4.0</td><td>4.1</td><td>4.1</td><td>4.0</td><td>3.9</td></tr><tr><td>Vic</td><td>4.7</td><td>4.7</td><td>4.5</td><td>4.4</td><td>4.5</td></tr><tr><td>Qld</td><td>4.1</td><td>4.2</td><td>4.1</td><td>4.0</td><td>3.9</td></tr><tr><td>WA</td><td>4.3</td><td>4.2</td><td>4.0</td><td>3.7</td><td>3.5</td></tr></table> Business conditions and confidence rebound NAB survey, balance of positive and negative responses Source: Knight Frank Research, NAB, Macrobond Forward orders slow in December Forward orders index, balance of positive and negative Source: Knight Frank Research, NAB # Consumer indicators Household spending continues to improve, but potential rate hikes weigh on confidence Discretionary items drive spending growth Annual growth in household spending by type (%) <table><tr><td></td><td>Nov-25</td><td>Aug-25</td><td>May-25</td><td>Feb-25</td><td>Nov-24</td></tr><tr><td>Household spending, current prices (m/m)</td><td>1.0</td><td>0.1</td><td>1.1</td><td>0.2</td><td>0.5</td></tr><tr><td>Household spending, current prices (y/y)</td><td>6.3</td><td>4.8</td><td>4.5</td><td>3.5</td><td>2.9</td></tr></table> Broad-based rise in household spending Annual growth in value of spending by category\* $(\%)$ Latest in Nov-25 <table><tr><td></td><td>m/m (%)</td><td>y/y (%)</td></tr><tr><td>Other</td><td>0.6</td><td>10.6</td></tr><tr><td>Recreation & Culture</td><td>1.7</td><td>8.6</td></tr><tr><td>Household Goods</td><td>2.2</td><td>8.2</td></tr><tr><td>Hotels, Cafes & Restaurants</td><td>1.2</td><td>7.5</td></tr><tr><td>Clothing & Footwear</td><td>2.0</td><td>7.4</td></tr><tr><td>Health</td><td>0.5</td><td>7.2</td></tr><tr><td>Food</td><td>0.7</td><td>7.2</td></tr><tr><td>Total</td><td>1.0</td><td>6.3</td></tr><tr><td>Transport</td><td>1.0</td><td>4.3</td></tr><tr><td>Alcohol & Tobacco</td><td>-1.8</td><td>-16.4</td></tr></table> Consumer sentiment falls as rates outlook shifts Confidence index, value above 100 signal optimism WA and QLD drive household spending Annual growth in value of spending by state $(\%)$ # Inflation & interest rates Elevated inflation is expected to drive the RBA to hike interest rates in 2026 Inflation remains above the RBA target Annual growth headline and trimmed mean inflation (y/y %) Source: Knight Frank Research, ABS Note: Data transitions from quarterly to monthly in April 2025. <table><tr><td></td><td>Dec-25</td><td>Sep-25</td><td>Jun-25</td></tr><tr><td>Headline CPI (m/m, %)</td><td>1.0</td><td>0.5</td><td>0.1</td></tr><tr><td>Headline CPI (y/y, %)</td><td>3.8</td><td>3.6</td><td>1.9</td></tr><tr><td>Trimmed mean inflation (y/y, %)</td><td>3.3</td><td>3.2</td><td>2.8</td></tr></table> Recent uptick in global inflation weakens Headline CPI (y/y, %) Source: Knight Frank Research, Macrobond <table><tr><td></td><td>Dec-25</td><td>Sep-25</td><td>Jun-25</td><td>Mar-25</td><td>Dec-24</td></tr><tr><td>Australia (y/y, %)</td><td>3.8</td><td>3.6</td><td>1.9</td><td>2.4</td><td>2.4</td></tr><tr><td>US (y/y, %)</td><td>2.7</td><td>2.1</td><td>2.7</td><td>2.4</td><td>2.9</td></tr><tr><td>UK (y/y, %)</td><td>3.3</td><td>3.8</td><td>3.6</td><td>2.6</td><td>2.6</td></tr><tr><td>Euro area (y/y, %)</td><td>1.9</td><td>2.2</td><td>2.0</td><td>2.2</td><td>2.4</td></tr></table> RBA hikes interest rates in February Historic rates and indicative RBA outlook $(\%)$ Source: Knight Frank Research, NAB, Oxford Economics, ASX Yields rise with higher cash rates expected Yield by swap/bond duration $(\%)$ Source: Knight Frank Research, Macrobond <table><tr><td></td><td>Feb-26</td><td>May-26</td><td>Aug-26</td><td>Nov-26</td><td>Feb-27</td></tr><tr><td>Cash rate target</td><td>3.85</td><td></td><td></td><td></td><td></td></tr><tr><td>NAB</td><td></td><td>4.10</td><td>4.10</td><td>4.10</td><td>4.10</td></tr><tr><td>Market pricing</td><td></td><td>4.06</td><td>4.05</td><td>4.14</td><td>4.15</td></tr></table> Month-end <table><tr><td></td><td>Jan-26</td><td>Oct-25</td><td>Jul-25</td><td>Apr-25</td><td>Jan-25</td></tr><tr><td>2-year swap</td><td>4.30</td><td>3.63</td><td>3.52</td><td>3.54</td><td>3.88</td></tr><tr><td>5-year swap</td><td>4.49</td><td>3.81</td><td>3.73</td><td>3.72</td><td>4.16</td></tr><tr><td>10-year bond</td><td>4.77</td><td>4.21</td><td>4.30</td><td>4.27</td><td>4.48</td></tr></table> Monthly average # Financial markets # Global financial markets remain stable and the Australian dollar strengthens Equities lift modestly in January Global equities, price indices, 1 Jan 2024 = 100 Source: Knight Frank Research, Macrobond <table><tr><td rowspan="2"></td><td colspan="4">Percentage change from</td></tr><tr><td>Oct-25</td><td>Jul-25</td><td>Apr-25</td><td>Jan-25</td></tr><tr><td>ASX 200</td><td>-1.8</td><td>2.0</td><td>13.0</td><td>5.8</td></tr><tr><td>S&P 500</td><td>2.8</td><td>10.0</td><td>29.1</td><td>15.9</td></tr><tr><td>Nasdaq</td><td>2.2</td><td>13.1</td><td>41.1</td><td>20.2</td></tr><tr><td>Euro STOXX 50</td><td>5.6</td><td>10.7</td><td>20.6</td><td>20.1</td></tr><tr><td>FTSE 350</td><td>6.1</td><td>12.1</td><td>22.6</td><td>19.7</td></tr></table> Monthly average Market volatility is below long-run average US VIX index - measure of market volatility (Index) Source: Knight Frank Research, Macrobond Gold price rises, surpassing US$5,000 US$ Source: Knight Frank Research, Macrobond <table><tr><td rowspan="2"></td><td colspan="5">Percentage change from</td></tr><tr><td>Dec-25</td><td>Sep-25</td><td>Jun-25</td><td>Mar-25</td><td>Dec-24</td></tr><tr><td>Gold (US/t oz)</td><td>4,325</td><td>12.1</td><td>31.0</td><td>38.5</td><td>66.0</td></tr><tr><td>LNG (US$/MMBtu)</td><td>9.9</td><td>-12.1</td><td>-23.6</td><td>-24.5</td><td>-30.3</td></tr><tr><td>Iron Ore (US$/t)</td><td>107.6</td><td>1.1</td><td>11.9</td><td>3.8</td><td>2.1</td></tr></table> Monthly average USD weakness drives appreciation of AUD AUD vs USD (LHS) and trade-weighted index (RHS) Source: Knight Frank Research, Macrobond <table><tr><td rowspan="2"></td><td colspan="5">Latest</td></tr><tr><td>Jan-26</td><td>Oct-25</td><td>Jul-25</td><td>Apr-25</td><td>Jan-25</td></tr><tr><td>USD per AUD</td><td>0.68</td><td>0.65</td><td>0.65</td><td>0.63</td><td>0.62</td></tr><tr><td colspan="6">Percentage change from</td></tr><tr><td>Trade weighted index</td><td>63.0</td><td>3.2</td><td>4.2</td><td>6.4</td><td>5.1</td></tr></table> Monthly average Recent research We like questions, if you've got one about our research, or would like some property advice, we would like to hear from you. You can also subscribe to our research. Alistair Read Senior Economist +61450831899 Alistair.Read@au.knightfrank.com Ben Burston Chief Economist +61290366756 Ben.Burston@au.knightfrank.com