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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
Ahead of the RBA Policy Decision on Tuesday, RBA-dated OIS rates are flat to 2bp firmer across meetings.
- This follows ANZ's upward revision of its peak RBA cash rate expectation. The bank now predicts the rate to reach 4.35%, up from the previous estimate of 4.10%. ANZ highlighted that a higher cash rate is necessary to bring inflation back to the target level within a reasonable timeframe. August is considered the most likely month for a move from the RBA.
- Additionally, according to a Bloomberg article, two economists suggest that Australia's central bank will likely raise interest rates three more times in the coming months to counter persistently high inflation, primarily driven by rising prices in the services sector. (link)
- The market currently attaches a 40% chance of a 25bp hike in June.
- Terminal rate expectations sit at 4.12%, a post-May hike high.
- Year-end easing expectations have been scaled back to 16bp versus 24bp at the end of last week.
Figure 1: RBA-Dated OIS – Terminal Rate Expectations
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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