Ausie Markets React To Westpac RBA Call Update

Australian markets have reacted to a change to Westpac's RBA call, now pointing to an imminent policy easing. Westpac wrote that "in a speech yesterday the Deputy Governor of the Reserve Bank gave a fairly clear hint that the Board is set to cut the cash rate and other key policy rates at its October Board meeting" and "now expect the RBA to cut the overnight cash rate to 10 basis points; to adopt a 10 basis point three year bond target; and to adjust the rate on any new drawdowns of the Term Funding Facility to 10 basis points".

• For context, worth noting that yesterday afternoon NAB said that the RBA will likely ease monetary policy in Oct or Nov by cutting the cash rate, 3-year yield target and the TFF rate and announcing purchases of bonds "in he 5-10 Year area of the curve".
• AUD took a hit as BBG ran headlines from the Westpac release and remains the worst G10 performer. AUD/USD has shed 41 pips and sits at $0.7130 at typing, having taken out key supports from Sep 22 low & Aug 20 low. The lower 2.0% Bollinger band at $0.7158 provides the initial downside target, followed by Aug 12 low of $0.7109.
• Aussie bond futures shot higher, YM sits +5.5 & XM +4.0 as we type, both off their respective reaction highs. Cash ACGB curve has shifted lower, yields trade 1.2-6.0bp richer, with the 3-5 sector outperforming. Australian 3-Year yield touched an all-time low of 0.17%. Bills last seen 2-3 ticks better off through the reds.
• Futures markets price in an ~83% chance of a rate cut at the next RBA meeting.