/STIR: Market Takes Bullock’s Press Conference As Hawkish, Odds Of ’24 Cut Reduce

Aussie bond and STIR futures came under pressure during RBA Governor Bullock’s press conference.

• Benchmark bond and bill futures closed just off late session lows, moving back to levels seen late last week.
• RBA-dated OIS moved to show ~7bp of easing through year end vs. ~12bp heading into the RBA decision.
• The continued discussion of a potential rate hike (a cut was not discussed) and Bullock suggesting that it is not so “obvious” what the RBA needs to do now provided a hawkish feel for markets.
• Bullock also pointed to an alertness when it comes to the potential for upside inflation risks.
• Still, she suggested that the case for a rate hike isn’t increasing,
• Bullock also stressed that the use of the term vigilant did not signal imminent tightening.
• Those last two points limited the hawkish reaction.