### POV: MARKETS NOT CONVINCED BY RBA' S........>

RBA: ### POV: MARKETS NOT CONVINCED BY RBA' S LABOUR MARKET VIEW

- Rates markets continues to believe that any potential monetary easing employed

by the RBA will not generate notable inflationary pressure. This seems to be a

global issue at present, with the major equity indices struggling for upside

momentum amid worries over U.S. Tsy curve inversion (see the U.S.

3-Month/10-Year yield spread), and subsequent recessionary fears intensifying.

Focus, in at least Australia & the Eurozone, has seemingly moved to fear that

the respective central banks (the RBA & ECB) will not be able to offset worries

re: growth, let alone promote upward price pressures.

- This isn't anything new in Australia. Markets pointed to looser policy long

before the RBA admitted that the outlook for the cash rate is evenly balanced,

putting its faith in the health of the labour market to restore inflationary

pressure. Interpolated OIS point to a 75% chance of at least one RBA rate cut by

year end, with Australian 10-Year yields registering fresh all-time lows &

3-Year yields trading well through the cash rate in recent sessions. Australian

10-Year breakevens have also registered fresh all-time lows.