Back From Best Levels

Little in the way of overt triggers to facilitate the reversal of the Lowe-inspired bid, with YM now back into negative territory. The RBA clearly remains cautious when it comes to the threat of inflation during the remainder of ’22 (it now sees inflation hitting 7% in Q4), while the market seemingly remains comfortable when it comes to pricing a more aggressive round of tightening than the RBA currently envisages. Albeit with a slight moderation in tightening priced through the remainder of the year post-Lowe (50bp now priced for the July meeting after Lowe pushed back against the idea of a bigger move and ~290bp of cumulative tightening priced through the remainder of the year). The minutes from the RBA’s June meeting are due to be released imminently.