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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.
RBA
Today's Q3 wage data resulted in a modest unwinding of some of the RBA rate hike premium that had become embedded into the IB strip. The first rate hike remains priced for Jun '22 (assuming the current target vs. effective cash rate relationship holds), but contracts from Apr '22 out to Apr '23 richened by 2.0-7.5bp on the day.
- In terms of the details, the data release failed to provide any upside surprise, printing in-line with broader expectations (+0.6% Q/Q, +2.2% Y/Y). The firming on the back of the in-line print was facilitated by the well-documented aggressive market positioning when it comes to the RBA hiking cycle (when compared to the Bank's own forward guidance). A reminder that the RBA has continually pointed to the likelihood that wages will need to rise by 3+% Y/Y to foster the inflationary outcome that it desires.
Fig. 1: IB Strip Implied Cash Rate Pricing
Source: MNI - Market News/Bloomberg/ASX
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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.
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