RBA Lays Out Some Scenarios

Aussie bond futures have twist flattened, YM -1.0, XM +1.7, while cash ACGBs trade little changed to 1.0 richer across the curve.

• The minutes from the RBA's June meeting pointed to an extension of the Bank's broader bond buying scheme, with a variety of scenarios re: the future shape of purchases sketched out (including a straight rollover of the existing scheme, scaling back the amount purchased or spreading the purchases over a longer period, or moving to an approach where the pace of the bond purchases is reviewed more frequently, based on the flow of data and the economic outlook). Re: the potential extension of the Bank's yield targeting measure to ACGB Nov '24, the board noted that it "had previously stated that it would not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. A key consideration for the decision regarding the yield target would be an assessment of the prospect of this condition being met some time in 2024." It also noted that market pricing indicated that bond market participants "did not, on balance, expect the yield target to be extended."
• The monthly Westpac leading index print headlines the local docket on Wednesday, but most of this week's local focus is already on RBA Governor Lowe's Thursday address titled "From Recovery to Expansion."