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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.
AUSSIE BONDS
The RBA increased the cash rate by 25bp, as widely expected, but watered down the hawkish message contained in the February statement by dropping the reference to “increases” in interest rates over coming months and replacing it with “further tightening of monetary policy will be needed”. The bid tone was also supported by the assertion from the RBA that recent data suggested a lower risk of a wage-price spiral and the rather bold claim that “inflation had peaked”, referencing the monthly CPI.
- ACGBs futures richen as much as 12bp and 18bp respectively after the decision with YM +14.0 and XM +8.0 at the close, a few bp back from their respective post-decision highs. Cash ACGB yields close 8-14bp lower with the 3/10 curve 6bp steeper.
- A similar move in swaps with little movement in EFP. Earlier today a 1y Vs. 1y1y flattener was deemed to have offered a good risk-return play on the RBA pivoting towards a less hawkish stance. At the close, the 1y1y rate was 13bp lower with the 1y Vs. 1y1y 5bp flatter than morning levels.
- Bill strip closed 6-17bp richer led by the late whites and front reds.
- RBA-dated OIS pricing softened by 4-13bp led by meetings beyond June. Terminal rate expectations drop to around 4.00% versus 4.13% prior to the RBA decision.
- RBA Governor Lowe is to deliver a speech at the AFR Business Summit tomorrow.
Figure 1: RBA-Dated OIS Pre- & Post-RBA
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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