Free Trial
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.
STIR
RBA dated OIS opened 8-16bp softer across meetings beyond September with early '24 leading. Only an 8% chance of a 25bp rate hike at the RBA's June meeting is priced. Terminal rate expectations currently sit at 3.89% versus 3.97% immediately after the RBA meeting.
- The May decision statement was largely unchanged from April, except for revised forecasts, a discussion on service price pressures, and an emphasis on returning inflation to target in “a reasonable timeframe”. The Bank's concerns are based on the tight labour market and wage growth, which remains consistent with the target only if productivity growth picks up.
- The rate outlook is likely to hinge on the quarterly CPI releases, which include services, unlike the monthly ones. The RBA's quarterly forecasts will also play a crucial role.
- The next "live" meeting will likely be in August, following Q2 CPI (July 26) and a new set of forecasts.
- With a cumulative 7bp of tightening priced by August, the market expects the economy and inflation will have deteriorated sufficiently to warrant a no-change decision at the August meeting.
- The May decision, however, highlights the asymmetric balance of risks on inflation forecasts, implying that even a slight reassessment could prompt the RBA to act.
Figure 1: Cash Rate & RBA-Dated OIS
Source: Bloomberg / MNI - Market News
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok