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RBA Dated OIS Slightly Firmer Ahead Of The RBA Policy Decision

STIR

RBA-dated OIS pricing is flat to 3bps firmer across meetings ahead of today’s RBA Policy Decision at 1430 AEDT.

  • The market currently assigns a 13% probability of a 25bp hike occurring today.
  • Meanwhile, terminal rate expectations have firmed by 3bps to 4.44% today. This adjustment aligns with the firming observed in the US STIR market overnight ahead of Friday's Non-Farm Payrolls data. There were no real catalysts for the move, just concerns that the market was overbought and rate-cut bets were too optimistic following Friday’s softening.
  • Today's movement has pared the trend decline in the expected terminal rate since the release of October's CPI Monthly data, which came in lower-than-expected last week, to 8bps from 11bps yesterday.

Figure 1: RBA-Dated OIS Terminal Rate Expectations Versus Cash Rate



Source: MNI – Market News / Bloomberg

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