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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.
STIR
It has been some time since AU STIR has given any serious thought to the possibility of an RBA rate hike. It was 13 March to be exact, the day before adverse Silicon Valley Bank developments pushed global STIR markets dramatically lower.
- At that time, AU STIR not only moved to price a pause from the RBA at the April meeting but also signalled the end of the tightening cycle.
- With global banking concerns receding, recent price movements suggest AU STIR could be rethinking its end-of-the-tightening-cycle call.
- While an April hike is still priced as an outside chance (18% of a 25bp hike), the cumulative tightening over April and May meetings is at 10bp, the highest level since 20 March.
- Maybe the market is starting to hedge itself against the possibility of an RBA pause with tightening bias next week and/or an unfavourable Q1 CPI print on 26 April.
- The market still has 25bp of easing by year-end priced off the expected May meeting terminal rate of 3.67%.
Figure 1: RBA Dated OIS: Today Vs. Yesterday
Source: MNI – Market News / Bloomberg
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.
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