It may seem puzzling that markets view the prospect of a November rate hike as a coin toss, given official figures released just one week ago showed the jobless rate hitting a five-year high of 4.7 per cent.
The Reserve Bank of Australia, after all, has a full-employment mandate. Unemployment is now running well ahead of the central bank’s forecasts, potentially signalling a faster-than-expected deterioration in the jobs market – which should, in theory, help bring inflation back within target without the need for higher interest rates.
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