Australia PPI Surprise Dims RBA Cut Hopes

Australia's producer prices unexpectedly surged in Q3, with annual PPI about 3.5% and quarterly PPI around 1.0%, surprising markets. A Reuters poll shows the Reserve Bank of Australia is widely expected to hold the cash rate at 3.60%, and many economists have pushed the next — and likely final — rate cut out to 2026. The inflation shock has sharply reduced market expectations for near-term easing and left banks forecasting rates will stay higher for longer. At the same time, a stronger US dollar and rising Treasury yields — which lifted the DXY to multi-week highs and pushed GBP/USD toward 1.31 — are weighing on the AUD and complicating the outlook for the timing of RBA policy easing despite some positive trade reports.