RBA's Return To Market Puts A Bid In

YM last +2.0, with XM +2.5, off the post-RBA highs that were seen as the Bank left monetary policy settings unchanged but confirmed that it will step back into purchasing Australian Government Securities on Wednesday, with further purchases to be undertaken as necessary. The cash curve has twist steepened on the day, with yields across the curve off cheapest levels on the back of the news re: the RBA's impending return market.

• Elsewhere, the text of the RBA release pointed to the clouds of uncertainty that are swirling at present. The language revealed a steady projection for 2020 GDP shrinkage when the SoMP is released on Friday, while there will be a slight lift in the unemployment profile owing to the COVID-19 situation in Victoria and "more people elsewhere in Australia looking for jobs." Also worth noting that the '21 GDP growth profile will seemingly edge lower. The RBA also notes that "in each of the scenarios considered by the Board, inflation remains below 2 per cent over the next couple of years."
• Today's local data releases had no tangible impact on the space, and merely re-affirmed already established ideas.
• The RBA's AGS purchases will garner the most interest tomorrow. Elsewhere, housing finance data and A$2.0bn worth of ACGB 1.00% 21 December 2030 supply will be seen.