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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
The announcement that Westpac had joined the other three major banks in advocating for a 25bp rate increase at the November meeting has led to a partial reversal of the earlier softening in RBA OIS pricing. This softening had occurred during RBA Governor Bullock's during testimony before the Senate Economics Committee.
- Governor Bullock's cautious and non-committal stance in response to questions regarding the implications of yesterday's higher-than-anticipated Q3 CPI print had initially caused pricing to soften, with reductions ranging from 4 to 6bps across meetings.
- Nonetheless, a notable shift in perspective from Westpac's Chief Economist, Luci Ellis, who previously served as an assistant governor at the RBA, with regards to a potential November rate hike, prompted the OIS market to retrace some of its earlier declines. As a result, today's softening has been pared to 1-2bps.
- Bloomberg reported Ellis's statement, where she noted, "I've gathered sufficient evidence to make my inaugural rate prediction, and it points toward an impending hike." (See link)
Figure 1: RBA-Dated OIS – Today Vs. Pre-CPI
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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