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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 RBA left its cash rate target unchanged and announced an end to its QE purchases come 10 February, as expected. The Bank also noted that it will “consider the issue of the reinvestment of the proceeds of future bond maturities at its meeting in May.”
- The forward guidance passage on interest rates was more dovish than the median expectation, with the central bank maintaining its reference to a patient approach re: rate rises via its now familiar state-based format, while underscoring projections surrounding a “gradual” pickup in wage growth and the impact of “modest” wage growth on underlying inflation.
- The Bank pointed to continued questions re: the stickiness of higher inflation, even though it now looks for a higher near-term peak in underlying inflation, in addition to projecting a higher underlying inflation profile in ’23 (underlying inflation is now seen above/within the upper half of the RBA’s 2-3% target band through ’23, i.e. for 2 years).
- Focus moves to RBA Governor Lowe’s first address of ’22, due Wednesday, with questions and references surrounding the prospects of ’22 rate hikes set to receive the most attention.
Click to view full review:MNI RBA Review - February 2022.pdf
Fig. 1: RBA Cash Rate Pricing Implied By The IB Strip
Source: MNI - Market News/ASX/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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