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STIR: RBA Dated OIS Slightly Firmer Ahead Of Q4 CPI

STIR
BulletMarketsFixed Income Bullets

RBA-dated OIS pricing is slightly firmer across meetings ahead of today’s Q4 CPI data. 

  • However, current pricing remains 3-10bps softer compared to levels seen prior to the release of November’s Monthly CPI data in early January.
  • Economists are divided on the timing of the first RBA rate cut, with opinions split between February and Q2. This makes today’s CPI data a critical focus.
  • While the headline CPI is expected to rise by 0.3% q/q, bringing the annual rate down to 2.5% from 2.8%, the market’s attention will likely centre on the underlying trimmed mean and services inflation. These components will be scrutinised as government electricity rebates are expected to weigh on the headline figure.
  • A 25bp rate cut is more than fully priced for April (121%), with the probability of a February cut at 76% (based on an effective cash rate of 4.34%).

 

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RBA-dated OIS pricing is slightly firmer across meetings ahead of today’s Q4 CPI data. 

  • However, current pricing remains 3-10bps softer compared to levels seen prior to the release of November’s Monthly CPI data in early January.
  • Economists are divided on the timing of the first RBA rate cut, with opinions split between February and Q2. This makes today’s CPI data a critical focus.
  • While the headline CPI is expected to rise by 0.3% q/q, bringing the annual rate down to 2.5% from 2.8%, the market’s attention will likely centre on the underlying trimmed mean and services inflation. These components will be scrutinised as government electricity rebates are expected to weigh on the headline figure.
  • A 25bp rate cut is more than fully priced for April (121%), with the probability of a February cut at 76% (based on an effective cash rate of 4.34%).

 

Keep reading...Show less