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RBA Dated OIS - Fairly Certain About A Pause


The RBA is set to announce its policy decision tomorrow with AU STIR currently attaching an 85% chance that the bank will deliver a no-change outcome for the first time since April 2022.

  • In the RBA's March Meeting Minutes, the board agreed to reconsider the possibility of a policy pause in April, with a focus on releases of employment, inflation, retail trade, and business surveys. The board also highlighted the importance of global economic developments in their considerations.
  • By flagging the possibility of an April policy pause in March, the RBA signalled a potential preference for that outcome, putting the burden of proof on the data to suggest otherwise. Given soft retail sales and a decelerating annual inflation rate (CPI monthly), it seems unlikely that the data will provide a compelling argument against a pause.
  • Furthermore, the RBA's March Meeting took place before the recent escalation in global banking concerns. As a result, the board is likely to lower its outlook for global growth, adding another pause-supportive factor to its decision-making process.

Figure 1: RBA Dated OIS: Today Vs. Friday

Source: MNI – Market News / Bloomberg

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