March 21, 2023 05:19 GMT
RBA Dated OIS Softening Hits Its Limit
The RBA Minutes today suggested the Board was evaluating the case for a pause while acknowledging that further tightening of monetary policy would likely be required to ensure that inflation returned to target.
- A lot of importance was placed on data (business surveys, employment, retail trade and inflation) in the run-up to the April meeting.
- Alas, this emphasis pre-dated banking crisis concerns. Yesterday, RBA Assistant Governor Kent explicitly cited that the banking crisis, among other issues, would be considered at the April meeting.
- With RBA-dated OIS little changed on the day despite a positive post-Minutes reaction (5-8bp softer for meetings beyond July), it appears as though the AU market has softened as far as it can go without further impetus, locally or globally.
Figure 1: RBA Dated OIS: Today Vs. Yesterday
Source: MNI – Market News / Bloomberg
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