VIEW: Westpac's Evans Changes RBA Call

Westpac's Bill Evans notes the following:

• "The RBA Board is likely to decide that there will be no extension of the YCT to the November 2024 bond at the July Board meeting because such action would imply no tightening till 2025." He previously expected the YCT to be extended to ACGB November 2024.
• "Westpac disagrees with that interpretation but cannot dispute the resulting decision."
• "Not extending YCT means that the gradual tightening we have seen through the YCT program in 2021 will not be reversed in July."
• "The QE program has now matured to allow the Board more flexibility going forward."
• "We expect the Governor to announce an open-ended A$5 billion per week purchase program to be reviewed later in 2021 to be introduced following the completion of QE2."
• "Given the confidence the RBA has in the QE program and Australia's low relative use of QE we continue to expect that the ultimate level of additional purchases will reach A$150 billion which we have advocated for some time."