Key Takeaways From Governor Lowe's Press Conference

Key takeaways from Governor Lowe's press conference:

• Affirmed RBA is at what it assumes to be the ELB for the cash rate, meaning that any further easing will likely be focused on QE, stressing the Bank is against the idea of a negative cash rate. Did not say that negative rates won't happen but stressed that it is extremely unlikely. Refers to relative central bank rates & policy.
• Lowe wouldn't say if today's move was unanimously backed by board, but pointed to broad consensus
• Noted that it would be helpful if 10-year ACGB yields came down a little further, but that is to be determined by the market. Also reiterated a focus on relative yields, using the U.S. & Canadian bond markets as examples to compare 10-Year ACGBs to.
• Noted that the Bank will be buying bonds in 5-10 Year baskets i.e. maturities will be a little below and above the raw cut off dates of the 5-10 Year range. Also noted the Bank can buy bonds outside of this range if needed.
• No hard and fast rule re: buying bonds that have been tapped or issued recently, but rough rule of thumb is a week.
• Re-affirmed view re: FX intervention, pointing to fundamental valuations, as well touching on expected knock-on impact of today's easing on the A$.