Off Lows Into RBA

YM & XM comfortably away from Sydney lows into the RBA decision, -4.5 & -2.5 respectively, with core FI markets finding a modest bid on the back of the previously flagged downtick in U.S. e-mini futures. The RBA will issue its latest monetary policy decision at the bottom of the hour, with the central bank set to announce the end of its QE scheme and leave the cash rate target unchanged. Focus is centred on the RBA’s forward guidance, with a tighter than expected labour market and higher than expected inflation set to force the RBA’s hand on that front (note that we expect the RBA to remain non-committal when its comes to the timing of future rate hikes, with focus on the wording surrounding the Bank’s CPI projections & wage growth).