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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EXECUTIVE SUMMARY
- The much firmer than expected Q122 CPI print has tilted the scales towards a cash rate hike at the RBA’s May meeting, The MNI markets team has slight bias towards a 15bp cash rate target hike at this meeting, although we concede that this is a close call
- We don’t see the impending Federal Election as an impedimentary factor to tightening.
- The Bank’s guidance paragraph will be monitored for views re: the velocity of additional rate hikes (assuming a 15bp rate hike is deployed). With a cumulative ~250bp of rate hikes priced over the remaining 8 meetings of 2022 there is a high bar for the RBA to provide an outright hawkish surprise vs. aggressive market pricing.
- The RBA will also make a decision on what it intends to do from the proceeds of maturing bonds held under the bond purchasing schemes employed as part of its response to COVID-19. We expect the Bank to outline a passive run off of maturing bonds held on its balance sheet.
- Click to view full preview: MNI RBA Preview - May 2022.pdf
Fig.1: The Evolution Of The Cash Rate Implied By The IB Strip During ‘22
Soucre: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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