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STIR
RBA-dated OIS pricing is dealing mixed across meetings today after yesterday’s RBA Policy Decision. A cumulative 43bps of easing is priced by year-end compared to 48bps going into yesterday’s decision.
- With the market having indicated a 0% likelihood of a 25bp hike or cut transpiring yesterday, it was the tone of the RBA statement that caused the market to scale back easing expectations.
- Nevertheless, terminal rate expectations have softened to 4.30% versus the prevailing effective cash rate of 4.32%. Any prospect of further tightening was eliminated in early December following the October CPI Monthly release in late November.
Figure 1: RBA-Dated OIS Terminal Rate Expectations Versus Cash Rate
Source: Bloomberg / MNI - Market News
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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