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EGB/Gilt: Risk-Driven Bear Steepening


(U1)‌‌ Consolidating


LEVELS UPDATE: Oil down but metals higher

RBA: VIEW: Westpac notes that "on face value, the stronger growth and higher
inflation forecasts might imply that the RBA is closer to raising rates than we
have expected. That may well be the case from their perspective. But if the
economy evolves as we expect with a slowdown in consumer spending, a contraction
in residential investment, and softer confidence partly linked to global
uncertainty, the RBA's growth and inflation forecasts are unlikely to be
achieved. Of course, it will take some time for these developments to be
apparent and based on the Governor's comment "the Board does not see a strong
case to adjust the cash rate in the near-term", we have ample time for the
outlook to evolve without a surprise policy adjustment based on these forecasts.
Westpac confirms its view that the cash rate will remain on hold through 2018,
2019 and 2020."
MNI London Bureau | +44 0203-865-3809 |