Market bets the RBA will raise rates by August

Markets are betting the Reserve Bank is more likely to raise the cash rate by August than not, after a dramatic week in which hotter than expected inflation numbers spurred economists to dump their forecasts.

In just three days, bond markets swung violently from a 70 per cent chance that the RBA’s next move would be a cut to a 52 per cent chance that the cash rate would climb from 4.35 per cent to 4.6 per cent by August.