VIEW: RBC note that "one key piece of new.......>

RBA: VIEW: RBC note that "one key piece of new information in the minutes was a

warning that should 1-2y bond yields remain a little higher in yield, the "Bank

would consider purchasing bonds in the secondary market to ensure that these

short-term yields are consistent with the target for three-year yields." This is

new and a shift from the usual "prepared to dial up or down" language. More

forceful and pointed, this jawboning may be enough on its own to send a message

to the market, but the RBA will likely step in further if not to reinforce the

message that yield curve control applies to all bonds out to 3 years. The

message to markets is clear. We note that the RBA has already been purchasing

large volumes of May-21s through its daily open market operations (rather than

via Yieldbroker tenders), buying a total of $3.9bn since late April at an

average yield of 0.252% though several in recent weeks has been at 0.275%,

somewhat above the yields on slightly longer 2-3y bonds."