RBA goes for broke 📈

The RBA delivered another shock to the market by hiking 50 basis points. Futures markets had been implying a 25-point hike with a slight chance of a move greater than that. Surveyed economists were mostly in the 25-point camp, with a few thinking 40 points. But it was another month and another surprise from the new, hawkish RBA. It pulled out a 50 pointer and now the cash rate is at 0.85%. Stocks were already on the back-foot leading into the decision. They were knocked lower following it. The ASX200 closed 1.5% lower with every sector finishing in negative territory. Financials were a major drag – who said higher rates were good for banks? – consumer discretionary took a tumble as the outlook for consumption diminishes because of higher rates, and the rate sensitive IT sector was the biggest loser in percentage terms, down 3%.

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