Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Desks note that the previously flagged (modest) flattening in the Australian Bill strip may be being facilitated by receiving flows in AUD 1-Year/1-Year forward swaps. The latter currently hovers a touch above the lowest level witnessed since early to mid-November. While the Bill strip hasn’t seen particularly heavy flows, perhaps some are looking for the RBA to strike a more cautious tone ahead of its 2-month New Year hiatus, with the omicron COVID variant likely to be at the core of any such tweaks in language. A reminder that AUD 1-Year/1-Year forward swap rates surged amid the broader global central repricing witnessed in October, providing one of the more notable global pain trades (many strategists had several attempts at fading the move, which proved to be unsuccessful). A notable retracement hasn’t been forthcoming, with the market consensus much more aggressive than the RBA’s own forward guidance when It comes to cash rate hikes.
Fig. 1: Australia 1-Year/1-Year Forward Swap Rate (%)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.