RBA eyes back-to-back hikes, Trump mulls Iran deal possibility

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Good morning and welcome back. The Reserve Bank delivers its second interest-rate decision of the year tomorrow, and it's shaping up to be another hike. Since the bank's last meeting, the inflation outlook has grown more complicated as a fresh energy shock — driven by conflict in the Middle East — ripples through global markets. Money markets are pricing a three-in-four chance of a rate rise in March and see more tightening to come. The RBA is among a slew of central banks convening this week. The Federal Reserve, the European Central Bank and the Bank of England are all expected to keep borrowing costs steady as they assess how much surging energy costs will feed through to consumer prices and growth. For the central banks that are about to set policy — overseeing about two-thirds of the global economy in total — the tone will turn more cautious as they acknowledge the risk of another inflation shock. — Ainsley Thomson, Wellington Bureau Chief What's happening now Staying with those price pressures, households are likely to face increased cost-of-living pain, with the inflation rate set to rise above 4.5% as the oil price climbs, Treasurer Jim Chalmers said. "If we were putting pencils down on those forecasts today, we'd have inflation peaking somewhere between the mid-to-high fours, " Chalmers said in an interview on Sky News. The government touted the country's ability to supply LNG reliably, while calling on trading partners to boost investment in its gas resources. "Reliable investment from Japan and other nations represented here at the Forum built Australia's resources industry and these partnerships are more important now than ever," Minister for Resources Madeleine King said in a speech at the Indo-Pacific Energy Security Ministerial and Business Forum in Tokyo. Energy Minister Chris Bowen says rural and regional areas are facing "real and unacceptable shortages" of fuel. The shortfall has been driven by a "massive explosion in demand" not because of any supply disruptions, Bowen said, adding Australia had received all of its shipments of petrol and diesel as expected. His comments came after the government announced it would release fuel from its emergency stockpile to meet demand in rural areas. Three more members of the Iranian women's soccer team granted asylum by Australia last week have decided to return to Iran, Home Affairs Minister Tony Burke said. On Wednesday, Australia had granted asylum to a total of six players and a support worker. Of these, four players have now decided to reverse their decisions and travel to Iran. The Iranian women's soccer team during the AFC Women's Asian Cup. Photographer: Albert Perez/Getty Images/Getty Images AsiaPac What happened overnight The US and Iran signaled no letup in fighting as President Donald Trump dangled the possibility of negotiations to end a conflict that's brought shipping in the strategic Strait of Hormuz to a near standstill and upended energy markets. Iranian Foreign Minister Abbas Araghchi said the Islamic Republic hasn't asked for talks or a ceasefire after Trump told NBC on Saturday that he's willing to make a deal but wants better terms. A top aide to Trump said the Pentagon estimates the Iran war, now in its third week, would take between four and six weeks. Kevin Hassett, head of the White House's National Economic Council, offered the timeline along with a caveat that the ultimate decision on when the war will conclude lies with Trump. Global oil markets face another week of turmoil after a US attack on Iran's main export hub heightened risks to supply across the Middle East, and deepened concerns over a conflict that's already upended energy flows. Trump said late on Friday that US forces had struck military targets on the vital Kharg Island and threatened to extend attacks to energy infrastructure if Tehran interferes with transit through the Strait of Hormuz. As Trump's administration wrestles with options in the war with Iran, it continues to consider "boots on the ground." While the Pentagon has been doing a good job with the massive air and sea assaults against Iranian targets, there are several dangerous missions that ultimately would require US troops within Iran's territory, writes James Stavridis in Bloomberg Opinion. What to watch • Nothing major scheduled One more thing... At the Oscars this year, Warner Bros. is competing largely with itself. The two frontrunners for best picture both come from the film division of Warner Bros. Discovery. Paul Thomas Anderson's One Battle After Another is the favorite among bookmakers and Oscar forecasting experts. Ryan Coogler's Sinners leads in nominations, with 16 overall, the most of any film in Oscars history. The winners are chosen by the 10,136 voting members of the academy. This year 317 films were eligible. The coveted trophies will be handed out starting at 4 p.m. local time at the Dolby Theatre in Los Angeles. One Battle After Another is displayed as a nominee for Best Picture at the 98th Academy Awards nominations announcement in Beverly Hills in January. AFP NEW: Explore live streaming news and interviews, documentaries, reporter analysis and more, all in one place. Check out Bloomberg.com/videos. Enjoying Australia Briefing? 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