Free Trial
USDCAD TECHS

Northbound

US TSYS

FI Support Evaporates Amid Late Month End Selling

AUDUSD TECHS

Remains Vulnerable

CANADA

Late Risk Off Sees USDCAD Eye Cycle Highs

US TSY OPTIONS

BLOCK, Late Puts

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

VIEW: RBC Stick With 50bp Aug Hike Call, But Note Risk Of 75bp Step

RBA

RBC note that “Today’s June labour force report was extremely strong from the headline print through to all the underlying details. This is an increasingly tight labour market possibly already beyond full employment which will keep pressure on the RBA to get to neutral sooner rather than later and think about restrictive territory. Coupled with the global trend to front load with the BoC delivering a 100bp hike overnight, markets will likely price in something between 50-75bp for the 2 August RBA meeting. With the advantage of more frequent (monthly) meetings, we stick with our current profile for +50bp in Aug and Sept followed by +25bp in Oct and Nov to see cash at 2.85% by year end. We would not, however, rule out +75bp in August, and indeed, think it prudent to move more quickly but suspect the RBA may opt for a more measured approach.”

147 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

RBC note that “Today’s June labour force report was extremely strong from the headline print through to all the underlying details. This is an increasingly tight labour market possibly already beyond full employment which will keep pressure on the RBA to get to neutral sooner rather than later and think about restrictive territory. Coupled with the global trend to front load with the BoC delivering a 100bp hike overnight, markets will likely price in something between 50-75bp for the 2 August RBA meeting. With the advantage of more frequent (monthly) meetings, we stick with our current profile for +50bp in Aug and Sept followed by +25bp in Oct and Nov to see cash at 2.85% by year end. We would not, however, rule out +75bp in August, and indeed, think it prudent to move more quickly but suspect the RBA may opt for a more measured approach.”