No Impact From RBA Releases, Focus Moves To Chinese Data & MLF

Aussie bonds have cheapened vs. early Sydney levels, with U.S. Tsys nudging away from Monday’s firmest levels. That leaves the major cash ACGBs running 1bp cheaper to 2bp richer across the curve, twist flattening with a pivot around 5s.

• There was nothing particularly shocking in the news wire headlines covering the minutes of the RBA’s latest monetary policy decision, which was to be expected given post-meeting communique from both Governor Lowe & Bullock
• When it comes to the review of the Bank’s forward deployment of guidance, much of the phrasing was familiar to RBA watchers given past Q&A sessions on the matter. The overarching takeaway seems to be that the RBA will be more qualitative if it deploys a form of forward guidance in future, having had its fingers burnt by the rapid move away from ultra-easy COVID reaction settings, which caused breaches of its explicit guidance deployed in the wake of the COVID outbreak. The Bank also noted that any future forward guidance would be flexible and conditional, with less focus on outright interest rate levels (which would not always be provided under future forward guidance regimes).
• The market has looked through both of those releases.
• Focus now moves to the Chinese risk events outlined earlier.