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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.
STIR
After spiking firmer following the surprise 25bp rate hike to 3.85%, effective 3.82%, from the RBA at its May meeting, terminal rate expectations had softened to a low of 3.87% after the release of the Statement on Monetary Policy. Since then, however, the expected terminal rate has moved back to 3.96%, just shy of the post-May hike high of 3.97%.
- The move higher in RBA terminal rate expectations has been assisted by a firming in US STIR, which troughed ahead solid payroll growth and an unexpected decline in the unemployment rate.
- Today’s 5bp firming in the expected RBA terminal rate looks to have been supported by an announcement by NAB that it has returned to its February call that the cash rate will peak at 4.1% in August, but possibly in July. It also sees risks skewed to the upside with a possible peak of 4.35%. The change in outlook reflects RBA expectations that inflation won’t return to the top of the target band until mid-2025.
Figure 1: RBA Dated OIS: Terminal Rate Expectations
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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