RBA Hikes to 4.85%, NZ Jobs Slump

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RBA Hikes to 4.85%, NZ Jobs Slump

4.85 RBA Interest Rate Decision-0.10 Employment Change5.70 Headline Unemployment Rate-19.10 Ai Group Industry2,826m Trade Balance

ASX 2009,065.10+2.61%

NZX 5014,090.97+0.84%

AUD/USD0.69-0.30%

NZD/USD0.56+0.27%

Market Snapshot

Asset	Level	Change
ASX 200	9,065.10	+2.61%
NZX 50	14,090.97	+0.84%
AUD/USD	0.69	-0.30%
NZD/USD	0.56	+0.27%
AUD/NZD	1.24	-0.59%
BHP	59.00	+6.19%
Gold	4,109.40	+0.89%
Brent Crude	97.94	+3.51%
Bitcoin	75,966.30	-5.52%
Australia 2Y Govt Yield	4.95%	+7 bp
Australia 10Y Govt Yield	5.21%	+6 bp

Prior Economic Events

Data	Prior	Cons	Actual
RBA Interest Rate Decision	4.60	4.85	4.85
RBA Monetary Policy Statement	-	-	-
RBA Rate Statement	-	-	-
RBA Press Conference	-	-	-
Employment Change Quarter-over-Quarter	0.50	0.40	-0.10
Headline Unemployment Rate	5.60	5.50	5.70
Ai Group Industry Index	-24.20	-	-19.10
Trade Balance	184m	800m	2,826m

Today's Economic Events

Data	Prior	Cons	Time
No events available

RBA raised the cash rate to 4.85% at its November 3 decision, a 25 bp increase that nonetheless failed to support AUD as markets priced a slower hiking path ahead.
New Zealand employment contracted 0.1% q/q in Q3 with unemployment rising to 5.7%, an 11-year high that sharply reduces the odds of a December RBNZ hike.
Australia's trade surplus blew out to A$2.83bn versus A$0.8bn consensus, while the Ai Group Industry Index improved to -19.1 from -24.2, and the ASX 200 surged 2.61% led by BHP's 6.19% rally.

Yesterday's Recap

The RBA delivered a 25 bp hike on November 3, lifting the cash rate to 4.85% from 4.6%, in line with consensus, alongside its Monetary Policy Statement and a post-meeting press conference. Despite the hike, AUD/USD fell 0.30% to 0.69 as markets judged the tightening cycle near its peak. New Zealand's Q3 labour data printed materially weaker than expected: employment change came in at -0.1% q/q against 0.4% consensus, and the headline unemployment rate rose to 5.7% versus 5.5% expected and 5.6% previously.

Australia's Ai Group Industry Index improved to -19.1 from -24.2, still deep in contraction territory. The Australian trade balance printed a surplus of A$2.83bn, far exceeding the A$0.8bn consensus and the prior A$184m. Domestic equities rallied hard, with the ASX 200 up 2.61% to 9,065.10 and BHP jumping 6.19% to A$59.00, while the NZX 50 added 0.84%.

Australian yields pushed higher, with the 2-year up 7 bp to 4.95% and the 10-year up 6 bp to 5.21%.

The Day Ahead

No tier-one Australian or New Zealand data releases are scheduled for today, leaving markets to digest the RBA decision and the weak NZ labour print. Attention turns to second-tier Australian activity indicators later in the week and any RBA commentary following the hike. NZD/USD traders will watch for RBNZ speak after the employment shock materially shifted rate expectations.

Australian housing data remains a key watch item given the WSJ's framing of a deepening housing slump as the RBA tightens further. Regional sentiment will also take a cue from Chinese demand signals for iron ore and coal, with BHP's rally suggesting miners are pricing resilient commodity demand.

Other Economic Notes

Australia's trade surplus strength underscores continued commodity export resilience, though the composition matters for AUD given iron ore and LNG price sensitivity to Chinese demand. The Ai Group index at -19.1 signals manufacturing and construction remain under pressure from higher rates. ↓ p.2

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Mortgage Lending Rate (New Borrowers, 1Y Fixed)

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Other Economic Notes (continued)

New Zealand's labour market deterioration is a leading indicator for consumption and housing, with the unemployment rate at 5.7% now clearly above the RBNZ's comfort zone. Australian housing is emerging as the key transmission channel of RBA tightening, with the WSJ noting the slump is deepening as another rate rise looms. Both economies face a difficult mix of sticky inflation — Australian CPI at 3.90% y/y and NZ CPI at 3.70% y/y — and softening activity.

Global Macro News

The Bank of England raised rates overnight, reinforcing the global tightening bias even as markets debate peak policy rates across developed economies. US midterm election outcomes are shaping dollar dynamics, with a post-election dollar sell-off evident in FX markets and the Korean won expected to strengthen on a Democratic sweep. The Japanese yen underperformed peers despite the dollar's pullback, highlighting divergent monetary policy expectations.

Brent crude jumped 3.51% to $97.94, a tailwind for Australian LNG and energy exporters but a headwind for input costs. Gold rose 0.89% to $4,109.40, reflecting persistent hedging demand. Bitcoin fell 5.52% to $75,966, signaling risk appetite remains selective.

Chinese demand remains the critical swing factor for Australian commodity exports and AUD.

Continuation

ANZ Central Banks Watch

The RBA's November 3 decision lifted the cash rate to 4.85%, with the accompanying Monetary Policy Statement and press conference framing further tightening as data-dependent. Deputy Governor Hauser publicly denied pressuring the board with a market-moving speech, and the deputy governor conceded the RBA is losing Australians' trust on inflation management — a reputational challenge as hikes continue. The next RBA meeting is December 8, with markets now questioning whether the cycle pauses given AUD's muted reaction to the hike.

The RBNZ held the OCR at 2.75% at its October 28 decision, and the weak Q3 labour data — unemployment at 5.7% and employment contracting 0.1% — has sharply faded December 9 hike bets. This creates clear divergence: the RBA is still hiking while the RBNZ's next move is increasingly in doubt, a dynamic reflected in AUD/NZD falling 0.59% to 1.24. Housing market linkages remain central to both banks' calculus, with Australian housing weakness and NZ construction softness likely to temper any further aggressive tightening.

ANZ Macro Daily(Beta Mode)