Financial markets were hedging their bets for a Melbourne Cup Day hike in the official cash rate with an implied 50/50 chance of an increase at the Reserve Bank of Australia’s second meeting under new governor Michelle Bullock.

Prices of the ASX 30 Day Interbank Cash Rate Futures implied a 50 per cent probability of a 25-basis point rise to 4.35 per cent at close of business Friday, November 3, with the status quo holding an equal chance. The current official cash rate is 4.10 per cent.

Markets have been busy interpreting every utterance the new governor has made since she took over from former governor Philip Lowe, trying to get a glimpse of the mindset of the economy’s most influential economist so early in her tenure.

After keeping rates unchanged last month, she got pulses racing in a speech on October 24 when she told the Commonwealth Bank Global Markets Conference the board “will not hesitate” to lift interest rates to combat inflation.

Commenting on bringing inflation back into the Bank’s target band while maintaining strong employment, Bullock said “It is possible that this can be done with the cash rate at its current level but there are risks that could see inflation return to target more slowly than currently forecast.”

“The Board will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation,” she added.

This was the day before the September CPI report delivered a surprise uptick in the inflation trend, with higher fuel prices driving up prices. The combination of hawkish commentary and the unexpected inflation report saw RBA-watchers at the big four banks shift their calls to a hike in November, which is now the new peak.

The RBA will announce its decision at 2:30pm on Tuesday, November 7 while the Melbourne Cup gets underway at 3:00.