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China Repo Rates Diverge on Wednesday


Australia WPI Continues Rising; +0.7% in Q1


ACGB Bid Facilitates Fresh, Limited Bid


EDM2 98.3125 Calls Lifted

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RBA: VIEW: ANZ note that they have "been highlighting the possibility that, in a
world of aggressive central bank support, the RBA's policy of yield curve
control (YCC) is too subtle. A direct way to assess the impact of YCC versus the
policy settings of other central banks is to consider the relative performance
of government bonds. After all, this is where much of the central bank fire
power is being directed. The 10y ACGB has performed as might be expected given
the relative shifts in front-end pricing. There does not appear to be any
additional underperformance that might be explained by more aggressive bond
buying on the part of the US Fed or RBNZ. This does not mean, however, that more
conventional QE is not 'outperforming' YCC (at least in terms of the impact on
bond yields). Still, the additional underperformance by ACGBs at this point is
relatively modest. As well, the AUD has pulled back from the highs it reached
last week against both the USD and NZD. All of which suggests there is as yet
little cause for the RBA to reconsider the suitability of YCC in a world of
aggressive central bank bond purchases."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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