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Richer After The RBA Leaves The Cash Rate Unchanged


ACGBs are 5-7bp richer, scaling back earlier weakness (YM -1.0 & XM -1.5) after the RBA decided to leave the cash rate unchanged at 4.10%. Some of the statement highlights include:

  • The RBA remains watchful of the risk of ongoing high inflation leading to larger price and wage increases. The outlook for household consumption and uncertainties in the global economy contributed to the uncertainties in the economic outlook.
  • Further tightening of monetary policy may be necessary to achieve the inflation target, but it depends on how the economy and inflation evolve.
  • The RBA will continue to monitor global developments, household spending trends, inflation forecasts, and the labour market. The Board is committed to returning inflation to target and will take necessary measures to achieve that goal.
  • Cash ACGBs 6-9bp richer after the RBA decision with the 3/10 curve 3bp steeper.
  • Swap rates are 5-8bp lower after the RBA decision to be 1-2bp higher on the day.
  • The bill strip has twist steepened with pricing +4 to -1.
  • RBA dated OIS pricing shunts 9-14bp softer across meetings.
  • Tomorrow the local calendar is light.
  • Tomorrow the AOFM plans to sell A$700mn of the 3.00% 21 November 2033 bond.

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