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AUSSIE BONDS

An unexpected Q/Q fall in domestic completed construction work during Q1 (-0.9% Vs. BBG median +1.0%) does little for the space, with YM & XM dealing just shy of their session highs, last +14.0 & +9.5, respectively.

  • Focus now moves across the Tasman to the latest RBNZ monetary policy decision. The latest CPI and jobs market data reinforce the case for continued monetary policy tightening in NZ, with headline inflation hitting three-decade highs and the unemployment rate holding at a record low. Policymakers will likely deliver another double-barrelled rate rise (50bp). Back in April, the Monetary Policy Committee described its decision as a "stitch in time," suggesting that front-loading the withdrawal of stimulus is justified in the current environment. The Bank’s updated economic forecasts will receive scrutiny, particularly the closely watched OCR track. Any fresh comments on the Reserve Bank's view on the neutral level of the OCR will also provide interest.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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