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RBA-dated OIS pricing is flat to 1bp firmer across meetings ahead of today’s employment report.
- In July, employment growth surprised materially to the downside, falling by –14.6k, with the ABS suggesting that “some changes around when people take their leave and start or leave a job” provided a partial explanation.
- Bloomberg consensus expects a bounce back in job creation of +25k in August, with the unemployment rate unchanged at 3.7%.
- The market currently gives an 8% chance of a 25bp hike at the October meeting.
- Terminal rate expectations sit at 4.19%, just above its lowest level since the RBA lifted the cash rate to 4.10% in early June. The peak expected terminal rate in early July was 4.75%, some 56bp above its current level.
Figure 1: RBA-Dated OIS Terminal Rate Expectations Versus Cash Rate
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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