Insights 
VT 
The TD-MI inflation gauge for Australia maintained a month-on-month growth of 0.3% in November. This suggests a stable inflation environment in the country.
The data is released amidst close scrutiny of key economic indicators and consumer price indexes. These figures are crucial for upcoming monetary policy decisions.
Understanding Inflationary Pressures
Economists use this information to understand inflationary pressures within the economy. It plays a part in shaping their future economic analyses.
The TD Securities-Melbourne Institute inflation gauge for November shows a steady 0.3% monthly rise, confirming that immediate price pressures are not re-accelerating. With the Reserve Bank of Australia (RBA) meeting tomorrow, this data reinforces our view that they will likely hold the cash rate steady at 4.35%. This stability suggests that near-term volatility in interest rate markets may be limited.
Looking at the broader picture, we know the last official quarterly CPI for Q3 2025 registered at 3.2% year-on-year, still stubbornly above the RBA’s target band. This latest monthly figure supports the narrative of a slow and grinding return to target, not a rapid drop-off that would warrant imminent rate cuts. Therefore, we should not position for any significant dovish pivot from the RBA in their upcoming statement.
Impact on Financial Markets
For those trading options on the Australian dollar, this steady inflation print is likely to weigh on implied volatility. We see an opportunity in selling short-dated AUD/USD straddles around the 0.6650 level, a strategy that would profit if the RBA delivers an expected on-hold decision and the currency remains in its recent range. This approach is similar to what was profitable during the holding patterns we observed back in mid-2024.
In the interest rate futures market, this data gives little reason for the ASX 30 Day Interbank Cash Rate Futures to reprice significantly. We should consider that the market has already pushed expectations for the first rate cut out to the third quarter of 2026. This data point simply solidifies that “higher for longer” view, making it a poor time for aggressive directional bets on near-term rate cuts.
Regarding the ASX 200 index, the removal of immediate rate hike fears is a modest positive. We can respond by selling out-of-the-money puts with expirations in late December or January, collecting premium on the view that the market is now less likely to face a negative hawkish shock. This steady economic data provides a more stable floor for the equity market heading into the end of the year.
