Little Changed With Narrow Ranges Ahead Of RBA Policy Decision

ACGBs (YM -0.4 & XM -0.9) are little changed ahead of today’s RBA Policy Decision.

• The RBA is expected to hold the cash rate for the fifth consecutive meeting. Governor Michele Bullock should stress flexible policy options, despite a recent inflation rise to 3.6%, and emphasize avoiding excessive short-term monetary adjustments, tolerating a slower return to the inflation target compared to international peers.
• There will not be updated forecasts, but a press conference will follow an hour after the statement is released. (see MNI RBA Preview here)
• Cash US tsys are 1-2bps richer in today's Asia-Pac session after yesterday's sell-off.
• Cash ACGBs are 1bp cheaper, with the AU-US 10-year yield differential at -14bps.
• Swap rates are slightly higher.
• The bills strip is slightly cheaper, with pricing flat to -1.
• RBA-dated OIS pricing is little changed across meetings today. Market pricing has undergone a significant reassessment since the May RBA Policy Meeting.
• Currently, the market is pricing approximately 14bps of easing by year-end from an anticipated terminal rate of 4.34%. In the run-up to the RBA’s May Policy meeting, the market was pricing no easing by year-end from an anticipated terminal rate of 4.42%.