-
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: Rates on Hold, Bank Charts Cautious Path
The Reserve Bank of Australia choose caution at its April meeting, pausing rates at 3.6% and making dovish tweaks to its guidance on potential future hikes.
RBA Governor Philip Lowe warned in the accompanying statement that “further tightening may well be needed” – a slight change from March’s text that said, “further tightening will be needed.” Markets had expected the pause and the overnight index swap rate remained largely unchanged with a 25bp cut priced in by December.
The change came alongside the RBA’s acknowledgement of problems within the U.S. and Swiss banking systems which "lead to a reassessment of the outlook for global interest rates". Lowe said he anticipated tighter financial conditions, "which would be an additional headwind for the global economy," before detailing the strength of the Australian banking system and its ability to provide credit.
INFLATION PEAK
Lowe noted inflation had likely peaked, pointing to “a range of information, including the monthly CPI indicator.” The monthly Consumer Price Index fell to 6.8% y/y in February from January’s 7.4% – the second consecutive monthly fall, according to data published last Wednesday (See: MNI BRIEF: Lower Feb CPI Print Adds to RBA Pause Case). The indicator peaked at 8.4% in December 2022. Lowe also removed language on service price inflation, but added a nod to upward pressure on utilities prices.
While OPEC+'s decision to cut oil production, alongside other central banks' drive to raise interest rates will be factors at the RBA’s May meeting, Lowe said the bank will wait, watch and assess.
“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," Lowe stated. While its stance on wages was unchanged from March, noting that the pace of increases is still consistent with the inflation target, the RBA said this was predicated on productivity growth.
This was the RBA’s first pause since its tightening cycle began from a record low 0.1% in May 2022. The Reserve reiterated its view that the full effect of a cumulative 350bp in hikes has not fully worked through the economy. The Reserve will continue to watch how households rolling out of lower fixed-rate mortgages into higher variable-rate loans handle higher rates.
The pause and statement weighed on the Australian dollar, which fell 0.35% to the 0.6760/65 region (See: RBA Statement Weighs on AUD/USD, 200-Day MA (0.6750) May Offer Support). Further insight into the central bank's thinking will come when Lowe presents a speech to the National Press Club on Wednesday 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.