RBNZ Surprise Hold; Hot AU CPI Boosts RBA Hike Bets

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RBNZ Surprise Hold; Hot AU CPI Boosts RBA Hike Bets

"" RBA Senate Appearance0.80 Inflation Rate4.30 Inflation Rate0.30 RBA Trimmed Mean CPI3.60 RBA Trimmed Mean CPI

ASX 2008,891.80+0.50%

NZX 5013,710.17+0.14%

AUD/USD0.70+0.04%

NZD/USD0.56-0.87%

Market Snapshot

Asset	Level	Change
ASX 200	8,891.80	+0.50%
NZX 50	13,710.17	+0.14%
AUD/USD	0.70	+0.04%
NZD/USD	0.56	-0.87%
AUD/NZD	1.25	+0.90%
BHP	57.52	-0.90%
Gold	4,023.20	-0.70%
Brent Crude	110.97	-3.77%
Bitcoin	80,724.54	-0.67%
Australia 2Y Govt Yield	4.92%	+6 bp
Australia 10Y Govt Yield	5.28%	+3 bp

Prior Economic Events

Data	Prior	Cons	Actual
RBA Senate Appearance	-	-	""
Inflation Rate Month-over-Month	0.40	0.70	0.80
Inflation Rate Year-over-Year	4	4.20	4.30
RBA Trimmed Mean CPI Month-over-Month	0.20	0.30	0.30
RBA Trimmed Mean CPI Year-over-Year	3.50	3.60	3.60
RBNZ Interest Rate Decision	2.75	3	2.75
RBNZ Rate Statement	-	-	-
RBNZ Press Conference	-	-	-
ANZ Business Confidence	51.90	-	52.50

Mortgage Lending Rate (New Borrowers, 1Y Fixed)

Today's Economic Events

Data	Prior	Cons	Time
PPI Quarter-over-Quarter	1.30	1	20:30

RBNZ unexpectedly held the OCR at 2.75% versus consensus for a hike to 3.00%, sending NZD/USD down 0.87% and AUD/NZD up 0.90% — the kiwi's sharpest slide versus the Aussie since 2017.
Australian Q3 CPI printed hot: headline 0.8% m/m and 4.3% y/y versus consensus 0.7% and 4.2%, with trimmed mean at 0.3% m/m and 3.6% y/y, cementing expectations for an RBA hike at the 3 November meeting.
Australian 2-year yields rose 6 bp to 4.92% and 10-year yields 3 bp to 5.28% as markets priced a more hawkish RBA path, while Brent crude fell 3.77% to $110.97.

Yesterday's Recap

Australia's Q3 CPI came in above consensus across every measure: headline rose 0.8% m/m (consensus 0.7%) and 4.3% y/y (consensus 4.2%), while the RBA's preferred trimmed mean printed 0.3% m/m and 3.6% y/y, both a touch above expectations. The result reinforced market pricing for another RBA hike at next week's meeting, with the Australian dollar trading above 0.7050 intraday before settling at 0.70, up 0.04%. In New Zealand, the RBNZ surprised the market by holding the OCR at 2.75% rather than delivering the hike consensus had expected, and the accompanying statement and press conference were read as leaving the door open to a December move.

The kiwi plunged, with NZD/USD falling 0.87% to 0.56 and AUD/NZD jumping 0.90% to 1.25 — the largest single-day kiwi decline versus the Aussie since 2017. NZ ANZ Business Confidence edged up to 52.5 from 51.9, a mildly constructive signal for activity. Domestic equities were firm, with the ASX 200 up 0.50% to 8,891.80 and the NZX 50 up 0.14% to 13,710.17, though BHP slipped 0.90% to $57.52.

Rates markets moved to price the Australian inflation surprise, with the 2-year yield up 6 bp to 4.92% and the 10-year up 3 bp to 5.28%.

The Day Ahead

The only scheduled ANZ release today is Australian PPI for the quarter, due at 20:30 ET, with consensus at 1.0% q/q following the prior 1.3% print. The data will be scrutinised for pipeline inflation pressure following yesterday's hot CPI, though it is unlikely to shift the RBA narrative materially given the CPI already landed. No New Zealand data is scheduled, leaving NZD direction to be driven by offshore factors and positioning after the RBNZ shock.

With the RBA meeting on 3 November now firmly in focus, markets will continue to refine hike odds, and the PPI print could nudge the curve at the margin. Attention also turns to the global backdrop, with the Fed decision looming and risk sentiment fragile after the oil selloff.

Other Economic Notes

The divergence between Australian and New Zealand policy trajectories is now the dominant ANZ macro theme: Australian inflation at 4.3% y/y is well above target and pushing the RBA toward further tightening, while New Zealand CPI at 3.70% y/y sits closer to the RBNZ's band and justified its decision to hold. ↓ p.2

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Mortgage Lending Rate (Floating/Variable)

Other Economic Notes (continued)

The trans-Tasman spread has repriced sharply, with AUD/NZD at 1.25 reflecting the widening rate differential. Australia's commodity exposure remains a key swing factor, with Brent's 3.77% drop and gold's 0.70% decline to $4,023.20 weighing on the terms of trade outlook, while BHP's softness hints at cautious mining sentiment. New Zealand's activity backdrop is stabilising modestly, with business confidence at 52.5, but the currency shock will tighten imported inflation and complicate the RBNZ's December calculus.

Housing markets in both countries remain sensitive to the renewed tightening bias.

Global Macro News

Global markets are positioned defensively ahead of the Federal Reserve decision, with the dollar steady and risk appetite subdued. Oil prices fell sharply, with Brent down 3.77% to $110.97, easing some inflation pressure globally but signalling demand concerns. Gold slipped 0.70% to $4,023.20, and Bitcoin eased 0.67% to $80,724.54, reflecting a broadly cautious tone across asset classes.

The kiwi's slump after the RBNZ hold was a notable outlier move, with the currency falling to sub-0.5600 versus the dollar and logging its steepest drop against the Aussie since 2017. China's growth outlook remains the critical external variable for both ANZ economies, given Australia's iron ore, coal and LNG trade linkages and New Zealand's exposure through commodity and tourism channels. The Fed outcome will shape near-term dollar direction and, by extension, AUD and NZD volatility into the RBA meeting.

Continuation

ANZ Central Banks Watch

The RBNZ held the OCR at 2.75% at its 28 October decision, defying consensus for a hike to 3.00%, with the committee voting to hold and the statement read as leaving a December move live; the next meeting is 9 December. The surprise triggered a sharp kiwi selloff and prompted commentary that the RBNZ is talking up a December hike, keeping the tightening bias intact despite the hold. In Australia, the RBA's cash rate stands at 4.60%, set at the 29 September decision, with the next meeting on 3 November now widely expected to deliver a further hike following the hot Q3 CPI.

The trimmed mean at 3.6% y/y remains above the target band, and yesterday's RBA Senate appearance kept communication firmly hawkish. The divergence is stark: the RBNZ paused at 2.75% while the RBA sits at 4.60% and leans toward tightening, a gap that has driven AUD/NZD to 1.25. Housing market sensitivity to higher rates remains a constraint on both central banks, but the inflation data currently dominates the reaction function in Australia.

ANZ Macro Daily(Beta Mode)