All eyes are on the Reserve Bank of Australia tomorrow as it could possibly make its 13th rate hike in the current tightening cycle.

Economists from major banks have already released their projections for the RBA’s monetary policy decision and only CommBank bet on a hold.

For ANZ, NAB, and Westpac economists, the RBA is set to hike the cash rate by another 25bps to 4.35%.

CommBank senior economist Belinda Allen finally said the lower-than-expected monthly consumer price index (CPI) reading for May has affected the balance of risks, making it more likely for the RBA to hold.

“The risks of a rate hike in July have ebbed and flowed with the local economic data over recent weeks,” she said.

“Parts of the CPI that focused on rents and market services did continue to show some signs of inflation accelerating or remaining elevated — the monthly CPI did show sticky underlying inflation measures, remaining above 6%, as well as acceleration in some services items, including hairdressing, insurance and recreation services.”

“Sticky services inflation and the RBA’s concerns around upside risks to inflation keep the chance of a hike in July in place, albeit it is not our base case.”

The labour force data also contribute to the stronger odds of a hold tomorrow — Ms Allen said while the labour market remains tight, there are signs forward indicators of labour demand are softening.

“Job vacancies continued to fall in the three months to May and are now down 10% from the peak,” she said.

Ms Allen’s views are different from those of her counterparts from other major banks.

NAB economist Taylor Nugent, for instance, said while the relief on the headline measure is “optically useful”, it would offer little comfort to RBA, especially given its concerns about the persistence of inflation across the stickier parts of the basket.

“The RBA’s recent decisions to increase rates after the April pause have been centered around an assessment of upside risks to inflation from sticky services inflation and shifts in wage and price setting behaviour,” he said.

“NAB continues to expect the RBA to raise rates to 4.6% in coming months, penciling in July and August.”

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