Australian Equity xStrategy

Research evidence excerpt

Australian Equity xStrategy

Macquarie Equity Research

08 June 2026

Equity Strategy

AustraliaAustralian Equity xStrategy

RBA outlook: A pause is not a pivot

Matthew Benji

Key Points Brooks, CFA Klotz

• The RBA is expected to hold in June, and we think the hawkish tone will

cause August rate hike risk to reprice higher in response. Figure 1 - Futures still pricing one

more RBA hike

• This will show a pause is not a pivot. RBA tone is too hawkish for a full-

rate cut rotation, especially in the context of global net hikes. RBACurrentRate Futures1m ago Implied3m agoYields (basis6m ago points)12m ago

485• Outlook favours higher-for-longer beneficiaries and defensive income.

• The focus of this report is RBA tone. We used Gemini to build evidence 410

on the RBA’s reaction function across policy-relevant communication 385

from the last three governors - Stevens, Lowe and Bullock. This is not just 360

a hawkish/dovish read. We used AI to map 10 policy channels to assess 335

potential RBA pivots. This is our second xStrategy report using AI to 310

turn hard-to-collect evidence into an investment view. The first was 285

Too much blue sky (May 2026) and our ENSO nowcast still says an El Jun-26 Aug-26 Oct-26 Dec-26 Feb-27 Apr-27 Jun-27 Aug-27 Oct-27

Niño is coming. Source: FactSet, Macquarie Research, June 2026.

• Australia's policy-growth cycle sits at a cross-road. Growth is slowing, Figure 2 - RBA tone is hawkish

the cash rate is restrictive, and CGT/negative gearing changes in the leading into June meeting

budget are expected to weigh on housing and the Australian consumer. Pre-RBA Meeting Tone vs Cash Rate, US Bear Markets & Recessions

At the same time, core inflation remains above the top end of the RBA's Bear Market Recession Cash Rate (left) Tone (right) RBA Hike Cut