-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
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.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI RBA WATCH: Hikes 25bp, Dovish Tweak Hints Pause Is Close
The Reserve Bank of Australia opened the door to a pause as soon as April, unveiling a dovish tweak to guidance after hiking rates 25bp to 3.6% on Tuesday.
The statement accompanying the 10th consecutive hike to an 11-year high sparked a repricing of peak rate expectations after declaring "further tightening of monetary policy will be needed", a toning down of February's hawkish - and time dependent - reference to more rates rises "over the coming months". Overnight indexed swaps modestly marked down the odds of a hike in April, with a 25bp increase priced in for the May meeting. A peak rate of around 4% has been priced in, down from 4.15% ahead of the decision. (See STIR : RBA-Dated OIS Settles Lower On Guidance Tweak, Further Aided By Inflation & Wage Rhetoric)
The RBA telegraphed it will be data dependent in deciding whether to add to the cumulative tightening of 350bp since May, as it spotlighted recent softer-than-expected data showing higher rates are dampening growth and price pressures. Inflation was assessed to have peaked after the monthly Consumer Price Index fell to 7.4% y/y in January from 8.4% y/y in December. Goods inflation is expected to moderate, while services price inflation remains high. Inflation is expected to fall to 3%, the top end of its 2-3% target, by mid-2025.
The board acknowledged growth had slowed and would be below trend over the next couple of years. Fourth quarter GDP slowed to 0.5% q/q from 0.7% q/q in Q3, with growth decelerating to 2.7% y/y from 5.9% y/y. Household consumption has slowed, while the outlook for construction has softened as rates squeeze disposable incomes and mortgage lending. The RBA's head of economic analysis warned in February that 880,000 loans worth AUD350 billion would roll over from fixed to variable rates this year. (See MNI BRIEF: Wage Hikes To Play Out 'A Bit further' - RBA's Kohler)
ALERT
Policymakers remain "alert" to the risk of a prices-wages spiral, though the pace of wage increases was deemed as consistent with the RBA's inflation target. Labour market conditions were judged to have "eased a little". The bank said recent data suggested "a lower risk of a cycle in which prices and wages chase one another".
The RBA's guidance was explicit in naming the data it would be monitoring ahead of its April 4 meeting. "In assessing when and how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market," the statement said. That guidance places the spotlight firmly on the February jobs report due March 16, February retail sales scheduled for March 28, and the February monthly CPI on March 29.
Further insight in the central bank's thinking will come when Governor Philip Lowe presents a speech titled Inflation and Recent Economic Data on Wednesday morning in Sydney.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
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.