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STIR: RBA Dated OIS Easing Expectations Strengthen But Not For Tomorrow

STIR
BulletMarketsFixed Income Bullets

RBA-dated OIS pricing has eased by 1–3bps across 2025 meetings ahead of tomorrow’s RBA policy decision.

  • A 25bps rate cut is now nearly fully priced for April, with the probability rising to 95%. However, a full rate cut is not anticipated until May.
  • Market expectations for the September meeting have softened by approximately 40bps since mid-November, driven by concerns over weakening domestic economic growth. Notably, in mid-November, a full 25bps cut wasn’t expected until August, marking a significant shift toward earlier rate cuts.
  • Despite the broader repricing, the probability of a rate cut at the December meeting remains low, with markets assigning only a 9% chance. 

 

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RBA-dated OIS pricing has eased by 1–3bps across 2025 meetings ahead of tomorrow’s RBA policy decision.

  • A 25bps rate cut is now nearly fully priced for April, with the probability rising to 95%. However, a full rate cut is not anticipated until May.
  • Market expectations for the September meeting have softened by approximately 40bps since mid-November, driven by concerns over weakening domestic economic growth. Notably, in mid-November, a full 25bps cut wasn’t expected until August, marking a significant shift toward earlier rate cuts.
  • Despite the broader repricing, the probability of a rate cut at the December meeting remains low, with markets assigning only a 9% chance. 

 

Keep reading...Show less