Free Trial

VIEW: RBC Roll Forward RBA Easing Call To Nov

RBA

RBC note that "the new information in the prepared remarks of Governor Lowe's speech gave the green light to further policy action. This all points to further easing and likely sooner rather than later especially given market pricing. We bring forward our Feb base case for a cut in the overnight rate, 3y yield target and TFF rate to 0.1% from 0.25% which was premised on a more challenging H1 supporting further easing. The RBA looks prepared to get ahead of this. The shift to more timely inflation data rather than forecasts for policy deliberations places more weight on the upcoming Q3 CPI due the Wed prior to the Nov board meeting. While headline CPI will lift after the sharp childcare/COVID-19 induced negative print in Q2, the more important core measure will likely ease further in annual terms towards 1%. A QE program of longer dated bonds (5y and 10y) will also be discussed at the Nov meeting. Governor Lowe's pointed comments in the Q&A session suggest that it is only a matter of time before specific quantities of bonds are purchased under a QE program."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.