1. Bond market braces for significant RBA rate hike today
Bond market investors reckon it’s a 50/50 chance that the RBA will raise the cash rate by half a percentage point today, “which would mark the largest jump in more than two decades,” the AFR reports.

“Bond market pricing also indicates a one-in-three chance the central bank will increase rates by half a percentage point, which would take the cash rate to 0.85%.

“Economists from Goldman Sachs and Bank of America are among those that anticipate a 50 basis point increase, while two of the big four banks are priming for a 40 basis point increase.”

2. Certain experts think peak inflation is near, here’s why
The inflation doves, otherwise referred to as ‘Team Transitory’ see a myriad of factors falling into place that in their view, points to a not-too-distant peak in inflation. The primary drivers being more than 60 central banks hiking interest rates in 2022, inventory overstock from supply chain bottlenecks, drops in the housing markets, and China’s reduced economic output.

“Ongoing supply chain blockages prompted retailers to stock up on the goods they need to ensure they can meet demand. With signs that consumers are growing cautious as interest rates rise, that’s now leaving an overhang of goods that will add downward pressure on prices,” Bloomberg reports.

As for the China situation, “Bloomberg Economics calculates that a 1 percentage point slowdown in Chinese industrial production can shave as much as 5 percentage points off global oil prices”.

3. PM Albanese attempts to contact Beijing over fighter jet encounter
Prime Minister Anthony Albanese has attempted to contact officials in Beijing after what he deemed a “dangerous manoeuvre” when a Chinese fighter jet flew directly in front of an Australian surveillance plane over the South China Sea.

The Chinese jet flew “very close to the side” of the P-8 aircraft, before cutting in front of the Australian plane and releasing a “bundle of chaff which contains small pieces of aluminum,” Defense Minister Richard Marles said Sunday.

“The Department of Defence has for many decades undertaken maritime surveillance activities in the region and does so in accordance with international law, exercising the right to freedom of navigation and overflight in international waters and airspace,” Albanese said.

4. New evidence to be unveiled regarding US Capitol attack
The House Select Committee tasked with investigating the attack on the Capitol on January 6, 2021 has found new evidence to be unveiled in what has been referred to as Watergate-style public hearings next week. The evidence allegedly reveals that “Donald Trump and top aides acted with corrupt intent to stop Joe Biden’s certification, according to sources close to the inquiry”. (The Guardian)

The panel’s ambitions for the hearings are twofold, the sources said: presenting the basis for alleging Trump broke the law and placing the Capitol attack in a broader context of efforts to overturn the election, with the ex-president’s involvement as the central thread.

5. ASX to slip on rate uncertainty
ASX futures were down 4 points or 0.06% to 7208 near 6.40am AEST, with the AUD -0.2% to 71.94 US cents.

On Wall St: Dow +0.1% S&P 500 +0.3% Nasdaq +0.4%.

In Europe: Stoxx 50 +1.5% FTSE +1% CAC +1% DAX +1.3%.

10-year yield: US 3.04% Australia 3.48%.