AFR: Expect RBA To Step In More Aggressively To Defend Its Word

Looking to the impending round of RBA bond purchases, John Kehoe of the AFR penned the following: "When the Reserve Bank of Australia's trading desk wades back into government bond markets this week, expect it to step in more aggressively to defend its word."…"Traders who are nursing financial losses from the heavy bond selling are questioning the credibility of RBA governor Philip Lowe's "best guess" (though not a "pledge") that he will delay raising interest rates until at least 2024. Those doubts should be vanquished when the RBA buys state government bonds on Wednesday and federal government debt in the secondary market on Thursday - after its A$1 billion of purchases on Monday fell short of expectations. Expect Lowe and deputy governor Guy Debelle to step up to the plate, before the full board affirms its commitment to defend the 0.10 per cent target on the April 2024 bond at its meeting next Tuesday."