Markets Look Through McCrann

Nothing in the way of tangible reaction in Bills/YM futures on the back of RBA watcher Terry McCrann’s latest article, which has been doing the rounds for a couple of hours.

• McCrann writes “the latest inflation numbers provide no basis for a further pre-Christmas rate hike... Indeed, the most important statistic out of the week was not the lower inflation number for October, but the seriously weak retail sales that surfaced the day before.”
• “My view that the Cup Day rate hike was probably the ‘rate hike too far’ is only reinforced by the October inflation numbers, showing a bigger than expected (but not by me) fall in the annual inflation rate to 4.9 per cent.”
• He concludes by stressing that “on all levels, the next two months should be all about watching and working out what is actually emerging across the economy.”
• A reminder that AUD-dated OIS closed Syndey trade pricing a mere ~2bp of tightening for next week’s RBA meeting, with terminal policy rate pricing ~10bp above effective cash rate levels.
• Dynamics in wider core global FI markets haven’t facilitated much in the way of a meaningful bid in Aussie fixed income, although the overnight session sees the space hold on to/marginally extend on post-monthly CPI gains.