Wages data could force RBA to turn page on rates cut

Core Viewpoint - The upcoming quarterly wage price index is critical for determining the likelihood of an interest rate cut in Australia, with a figure below 3.4% potentially reigniting discussions for a cut in the first half of 2026 [1][2][4]. Wage Growth and Interest Rates - The wage price index currently stands at 3.4%, which aligns with market consensus and the Reserve Bank's forecast, indicating limited chances for a rate cut if this figure is maintained [1][6]. - Wage growth peaked in late 2023 at over 4%, but has since moderated to 3.4%, still higher than much of the past decade [6][10]. - A higher wage growth figure would diminish the prospects for an interest rate cut, suggesting that the current cycle of cuts may have reached its bottom [2][6]. Central Bank and Economic Indicators - The Reserve Bank of Australia (RBA) maintained the cash rate target at 3.6% in October due to higher-than-expected consumer price index inflation at 3.2% [8]. - The RBA's recent meeting minutes are expected to reflect a lack of enthusiasm for further rate cuts, as indicated by Governor Michele Bullock [7]. Banking Sector Scrutiny - Upcoming committee hearings in Canberra will question leaders from the big four banks regarding their practices, including interest rates and their impact on customers and employees [9][12]. - The committee aims to address concerns about the banking system's scrutiny and the timing discrepancies between RBA decisions and bank rate adjustments [12][13].