Insights 
VT 
The TD-MI Inflation Gauge in Australia dropped to 0.3% in October, down from 0.4% previously.
This decline may influence the Reserve Bank of Australia’s decisions on interest rates, as they balance inflation and growth challenges.
Analysts Monitoring Economic Trends
Analysts will monitor Australia’s economic trends amid global central banks’ efforts to manage similar challenges.
Future updates on economic indicators and central bank announcements will provide further clarity.
Related analyses include assessments of the Australian dollar against other currencies and potential effects on commodity prices in light of rate changes.
Continued observation is required as the economic landscape evolves.
With the TD-MI inflation gauge slowing to 0.3% in October, this adds weight to the idea that the Reserve Bank of Australia will keep interest rates on hold. This disinflationary signal, however slight, eases the pressure on the central bank to hike again. We are already seeing short-term bond yields begin to price in a more dovish stance from the RBA.
Implications For Interest Rate Traders
This reading is particularly significant after the official Q3 2025 CPI data came in at a stubborn 3.8%, keeping markets nervous about another rate rise. This softer monthly figure is the first piece of evidence suggesting the inflation fight that defined the 2023-2024 period may finally be turning a corner. This is exactly the kind of data that supports a more patient, wait-and-see approach from policymakers.
For interest rate traders, this means re-evaluating the odds of a future hike. The ASX 30 Day Interbank Cash Rate Futures, which before this news priced a nearly 40% chance of a hike by February 2026, will likely see that probability fall significantly. We believe positioning for lower short-term rates, perhaps by buying bank bill futures, is a prudent move in the coming weeks.
This outlook is likely to weigh on the Australian dollar. With reduced expectations for a rate hike, the AUD becomes less attractive, particularly as the US Federal Reserve has signalled a firm pause in its own tightening cycle. We see potential for the AUD/USD, currently trading around 0.6850, to test lower levels, making strategies like buying put options an attractive way to position for a decline.
This data might also dampen currency volatility in the immediate term. Since the reading doesn’t force the RBA’s hand but merely supports the status quo, the AUD may enter a period of range-bound trading. Selling options premium through strategies like strangles could be effective, but we would advise waiting for the next employment report for confirmation.
