Light Pressure On The Back of Ex-RBA Member Edwards’ Comments

The release of the previously flagged WSJ interview with ex-RBA board member John Edwards (who is known to have had hawkish views in the past) initially applied some pressure to the space, with YM falling below yesterday’s low, registering fresh cycle lows in the process. The IR strip and XM futures also came under some light pressure, although the aforementioned contracts have stabilised or moved off session lows. YM -5.0 & XM -7.5, while the IR strip trades flat to 7 ticks softer through the reds. Note that the sell off may have been tempered by the fact the Edwards’ view of 4 RBA rate hikes in ’22 is a little less aggressive than IB strip pricing at present (which looks for 5x hikes in ’22, assuming the first rate hike comes in the form of a 15bp increment), as fleshed out in a previous bullet, in addition to his hawkish disposition.