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Richer, RBA Gov. Lowe Announces Changes To RBA


ACGBs richened to Sydney session highs as RBA Governor Lowe’s commenced his speech to the Economic Society of Australia, but reversed part of the gains (YM +4.0 & XM +4.0) after the Q&A session revealed little that was new with respect to the policy outlook.

  • Lowe did, however, announce changes in response to the recent review of the central bank, according to the ABC. Amongst other initiatives, from 2024, the RBA board will only meet eight times a year, rather than 11. He said the RBA governor will hold a press conference after every board meeting to explain the board's interest rate decision. (See link)
  • Cash ACGBs are 4-5bp richer with the AU-US 10-year yield differential -4bp at +18bp.
  • Swap rates are 4-6bp lower.
  • Bills pricing is +2 to +6 with late whites leading.
  • RBA dated OIS 7-8bp softer for meetings beyond December.
  • Tomorrow the local calendar sees June MI Inflation Expectations.
  • Attention now turns to the release of June US CPI data later. Consensus puts core CPI at 0.3% m/m. A higher-than-expected reading, particularly with robust details in ex-shelter services, would further solidify the "higher for longer" narrative. Conversely, if there is a miss, it would have the most significant impact on pricing expectations for September.

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