RBA to cut in November as labour market cools

RBA officials have recently been downplaying the potential for further rate cuts. However, we believe their hawkish pivot won't last. Indeed, the surge in the jobless rate to a four-year high in September clearly signals that the labour market is in worse shape than the RBA had anticipated. With unit labour cost growth also softening, we think the Bank's concerns regarding the persistence of services inflation are likely overdone. All told, we still see a 25bp cut in November as more likely than not.