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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.
STIR
STIR markets within the $-bloc have shown mixed performances over the past couple of weeks. Year-end official rate expectations have firmed by 3bps in the US, 15bps in Canada, and 26bps in Australia while softening by 10bps in New Zealand.
- Interestingly, year-end expectations now place the official rate in Canada below that of Australia for the first time in this cycle. If this occurs, it would be the first time since 2018.
- The key driver of Australia's firming expectations was a hawkish hold by the RBA at its June meeting, coupled with hotter-than-expected CPI data for May.
- Yesterday’s release of the June meeting minutes suggested that the RBA Board will hike rates if it determines that policy is “not sufficiently restrictive to return inflation to target within a reasonable timeframe” because disinflation and closure of the output gap are slower than expected.
- At the August 6 meeting that assessment will be dependent on Q2 CPI on July 31 and the updated staff forecasts which will include not just the new CPI but also fiscal stimulus information. It will also “carefully review the extent of spare capacity” in this exercise.
Figure 1: $-Bloc STIR (%)
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.
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