RBA Lowe's Banker Briefing In Focus

All eyes will be on the Australian market open after an Australian Financial Review (AFR) report revealed that the Governor had “briefed traders at the country’s major banks at a private event hosted by Barrenjoey, two days after the central bank surprised markets with a hawkish outlook.” (see this link for more details).

• Private briefing by senior RBA officials hosted by banks is not uncommon, but Dr Lowe attended the last Thursday’s event “after declining to make a public address on the outlook for monetary policy, which he has done after the first RBA board meeting of the year since 2017.”
• Thursday’s Chatham House appearance “coincided with a modest but noticeable fall in three-year bond futures contract”, according to the AFR”.
• RBA Governor Lowe is likely to face questions about the event when he appears before the Senate Economics Legislation Committee on Wednesday.
• The controversy surrounding this event comes at a time when Dr Lowe has been facing increasing scrutiny about the extent of monetary tightening.
• Moreover, Dr Lowe’s term is due to expire in September and the RBA is under an independent review.
• Treasurer Chalmers has stated that the review into the RBA will look at how the RBA communicates with the broader public around interest rate decisions, with focus on whether regular pressure conferences post decisions could be held.