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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 pricing is flat to 1bp firmer across meetings ahead of today’s CPI Monthly for August.
- Consensus expects the August CPI Monthly to print 5.2% y/y after 4.9% in July. If correct, this will be the first re-acceleration in annual rate in 4 months. Fuel prices will be a big driver for the jump in inflation in August while rent inflation is likely to be persistent.
- The market currently gives only an 11% chance of a 25bp hike at the October meeting.
- However, terminal rate expectations sit at 4.31%, some 15bps higher than in early September and at the highest level since late July. Nonetheless, the peak expected rate remains ~ 45bps lower than the 4.75% seen in early July.
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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