Flatter In Wake Of Lowe

The curve is happy to drive flatter in early Sydney trade on the phraseology deployed by RBA Governor Lowe, as he failed to rule out extending the duration of the Bank's ACGB purchases beyond what we have seen in the latest round of QE (directly referencing the 5-10 Year sector, flagging higher relative 10-Year ACGB yields vs. global peers), although he did note that the benefits of such a move need to be assessed and that no final decision has been made. YM +1.5, XM +6.0.

• Lowe's language surrounding the labour markets leaves the door open to further easing, as he noted that the board "want to see more than just 'progress towards full employment." He noted that "as the economy opens up, though, it is reasonable to expect that further monetary easing would get more traction than was the case earlier." This suggests that fresh easing may see more bang for the buck, although the Governor cautioned on the well-trodden risks surrounding loose monetary policy settings (although pointed to benefits of looser policy outweighing risks).
• Bills unchanged to +2 through the reds.
• The monthly round of Australian labour market data is due later today.