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VIEW: ANZ note that "with 3y yields rising......>

- Bonds & Currency News | Market News" >
RBA: VIEW: ANZ note that "with 3y yields rising the most since reaching the YCC
target, we will get a better idea of the RBA's views on the operation of the
target. In particular, what the acceptable 'band' around 0.25% is and how long
it is allowed to deviate without intervention. With a public holiday in much of
Australia on Monday and assuming the RBA sticks to its Monday, Wednesday,
Thursday purchase schedule, we will be waiting until Wednesday for the RBA to
act - around a week after the 3y yield deviated more than a basis points or so
from the target. Of course, the Monday, Wednesday, Thursday purchases schedule
is arbitrary to an extent (and the RBA hasn't made any purchases for four
weeks), so there is a risk that it steps in before then. Nevertheless, our
expectation is that it will wait until Wednesday (10 June) to conduct purchases
if the 3y yield is sufficiently above 0.25% to prompt action. These purchases,
if made, will likely be focused on the 3y-5y part of the curve. It may also
follow-up with a second round of purchases on Thursday."
- Bonds & Currency News | Market News" >
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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