ACGBs Shrug Off RBA Meeting Minutes

Aussie Bonds are little changed on net in the wake of the release of the minutes from the most recent RBA meeting, with the Bank’s acknowledgement that the cash rate is “well below” the lower estimates of neutral providing the highlight of the release. Elsewhere, the Bank noted that the data at its disposal meant that it could affirm its view for faster wage growth in the time ahead, while noting that the outlook for domestic economic activity had eased a little on the back of “uncertainty relating to the response of households to rising inflation, higher interest rates and declining housing prices in some cities,” This came alongside the Bank reaffirming its guidance re: interest rates, while highlighting the need to maintain the anchoring of medium-term inflation expectations. All in all, none of these comments provided much in the way of surprise for the ACGB space.

• YM -3.5, while XM is down -4.0. Wider cash ACGB trade also sees a fairly parallel round of cheapening across the curve in the net terms vs. yesterday’s close. EFPs are essentially unchanged on the day, while Bills run 3-6bp lower through the reds.