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Australia's cash rate still likely to be hiked this year

The Reserve Bank of Australia (RBA) held its cash rate at 4.75% today, as expected. The global economy looks to be slowing, but above-trend growth is nonetheless still likely in Australia and there is already little spare capacity in the economy. We continue to believe the RBA will eventually tighten more aggressively than the market anticipates. The next hike is likely to come in August.

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