I have opined this week about the potential for a rate cut in September, but let’s look forward to one of Australia’s favourite pastimes: betting on the November rate cut, also known as the Melbourne Cup cut. Will it still happen, given the sharp-ish inflation numbers we saw this week?

It’s looking a little shaky—but not ruled out.

The local inflation number that came out this week spooked a few economists. They’re now saying forget about that Cup Day cut. But I’m not giving up on it just yet. A lot of other economists still think the November cut is on the table. I think it is too—but it’ll depend on the data we get over the next few weeks. We’ll need to see a meaningful drop in inflation and jobs growth. Those will be the real odds-setters.

Now, let’s not forget we’re in September, which is never a great month for stocks. There’s a bit of profit taking going on right now, especially in some of the big names like Nvidia and Oracle. These stocks have seen massive gains recently, so it makes sense that some of the Smarties are locking in profits. That adds a bit of noise to the market, but it’s not panic—it’s positioning.

Overnight, we saw some data from the US that showed jobless claims were lower than expected and economic growth was stronger than anticipated. That’s great news for the economy, but funnily enough, not always great for the stock market. Why? Because a stronger economy might mean the Federal Reserve doesn’t cut interest rates as many times as people were hoping. Markets love a good rate cut. So when cuts are delayed, markets sulk.

That said, the Fed’s preferred inflation measure—the PCE, or Personal Consumption Expenditures index—is due out soon. If that comes in low, the rate cut story gets a second wind. We might see a scenario where the US has a growing economy with slowing inflation. That would be the Goldilocks outcome: not too hot, not too cold, and just right for another one or two cuts.

So, is the Melbourne Cup cut still in play? Yes—but the horses haven’t even reached the back straight yet. The next few furlongs—aka data drops—will tell us a lot.

And if you’re wondering about the Yanks, they’re facing their own wild card: a possible government shutdown at the end of the month. That’s another layer of uncertainty that could spook markets, and in turn, central banks.

As always, it’s not just about what we want to happen—it’s about what the data forces the RBA to do. And right now, that data is keeping the race interesting.