The recent jump in crude oil prices will lift headline inflation in Australia, but we doubt it will have much bearing on underlying inflation. Accordingly, we still think that the RBA's next move will be a rate cut rather than a hike. Meanwhile, the resilience of economic activity in New Zealand may encourage the RBNZ to deliver another rate hike at its November meeting, but we consider it more likely that the Bank will respond by keeping interest rates higher for even longer.
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