On 31 July, Australia will discover how prices changed from March through June in the ABS' Q2 CPI release.
The inflation figures could be hugely consequential for the monetary policy decision in August - a nasty surprise could force the RBA's hand.
Many economists agree that a quarterly inflation print anywhere north of 1.1% could stoke the RBA out of its slumber once again.
Last week, the labour force numbers for June dropped, showing unemployment increased slightly to 4.1%, but more than 50,000 new jobs were created.
CommBank Head of Australian Economics Gareth Aird said that while unemployment numbers did not support a rate hike, the labour market is still strong enough that the RBA won't hesitate if inflation is judged still too high.
On the day unemployment came out, the chances of a rate hike per the RBA ASX rate tracker went from 15% to 22%.
With term deposit rates trending up, it looks like most banks are at least gearing up for a prolonged period before the cash rate is cut, although in more positive indicators for mortgage holders this week also saw NAB slash fixed home loan rates.
In any case, these were the major TD rate changes this week.
Macquarie hikes up to 10 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $5,000-$1,000,000 | End of term | 4.95% p.a (+0.05) |
| One year | $5,000-$1,000,000 | End of term | 5.10% p.a (+0.10) |
Macquarie fired its second barrel after hiking last week, taking one year terms to 5.10% p.a.
Of the top ten banks by customer deposits, Macquarie now offers the joint highest (with ING) one year TD rate.
Locking in $20,000 with Macquarie for a year right now would earn you a $1,020 interest payment in July '25, subject to any tax.
Macquarie also boosted three month returns to within spitting distance of the 5% p.a. mark, which is also the rate that big hitters Heartland Bank and Judo are currently on for three months.
Bank of Sydney hikes three month terms 25 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months (Online only) | $1,000-$1,000,000 | End of term | 4.90% p.a (+0.25) |
| Six months (Online only) | $1,000-$1,000,000 | End of term | 5.15% p.a (+0.05) |
Bank of Sydney also got in on the three month action with a 0.25% boost to three month returns.
This is a competitive rate, just 5 bps behind the aforementioned Macquarie - but the catch is that this rate is exclusively for online customers.
If you're not sold on the whole internet thing, you'll have to settle for the more modest 4.55% p.a. rate available on three month terms in branch.
Bank of Sydney's premiere TD, six months, also got a little boost, to now sit 15 bps behind the market leaders Heartland Bank - that one too is online only.
Other movers
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Horizon Bank hiked one year rates 20 bps
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Arab Bank Australia cut up to 10 bps
"TD rates pushing north with Q2 inflation numbers around the corner" was originally published on Savings.com.au and was republished with permission.