AUD & Aussie Bonds Little Moved In Wake Of RBA Minutes

AUD & Aussie bond futures sit little changed vs. pre-RBA minute levels at typing. The minutes saw RBA underline its stance re: remaining patient when it comes to cash rate hikes, reaffirming the previously outlined parameters for such a move.

• On the international front, the Bank noted that “conditions were in place for a sustained expansion, although the new Omicron variant of COVID-19 posed additional uncertainty for the near-term outlook.” Going on to stress “the risk to the recovery posed by the Omicron variant would also be more apparent” come the February board meeting.
• On its February QE decision, the board noted that “the first option (i.e. to reduce the pace of purchases from mid February with an expectation of a likely end point in May 2022) was consistent with the Bank's November forecasts for employment and inflation. If better-than-expected progress towards the Board's goals was made, then the third option (i.e. to cease bond purchases in mid February) would become more appropriate. Alternatively, if progress was slower than expected, or if the outlook became more uncertain, the case for the second option (i.e. to reduce the pace of purchases and then review it again in May 2022) would be stronger. Members agreed these options constituted the most plausible alternatives. If there were another serious economic setback, a different set of options would need to be considered.” This was a reiteration of the Bank’s previously outlined view.