Speculative investors are increasingly betting the Reserve Bank of Australia will raise interest rates again in November as inflation remains above the central bank's target. Swaps are pricing about a 45% chance of a quarter-point hike by November, up from 38% before Tuesday's RBA decision, while trading in November 2026 interbank cash-rate futures rose to over a three-month high on the day of the meeting. The wagers signaled growing doubts that the RBA's tightening cycle is over, even after policymakers kept rates on hold this week, with traders looking to upcoming price and labor-market data for signs that another increase will be needed this year. Scott Bovis, director of short-term interest-rates trading at Commonwealth Bank of Australia in Sydney, said fast money remains active in positioning for inflation to prove more persistent than forecast, betting that this will eventually force the RBA to tighten policy further. While the RBA board unanimously voted this week to keep the cash rate at 4.35%, Governor Michele Bullock repeatedly stressed that inflation risks remain skewed to the upside and said it was quite possible the central bank would need to raise borrowing costs again. Expectations of further tightening are also reshaping the yield curve, with investors moving out of shorter-maturity bonds and adding exposure further out, according to Mark Elworthy, Sydney-based head of Australia and New Zealand rates trading at Bank of America. Some investors are taking a more cautious view, pointing to a gradual rise in unemployment and weaker housing sentiment as signs that restrictive policy is strangling the economy, with UBS Asset Management among those that see little need for further tightening. BlackRock Inc. is among those betting another increase will be needed, favoring a hike in November, with Katherine Palmer, head of fixed income and credit product strategy at BlackRock's Australian unit, saying the logical month for us is November.
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