RBA: No rate changes - ANZ

Martin Whetton, Senior Rates Strategist at ANZ, points out that the RBA’s top brass have sent a clear message to the markets, rates are not moving for the moment and global changes have no implications for local policy.

Key Quotes

“For AUD rates, we expect the curve to remain steep, with a pinned front end; and for cross-market trades to offer some value. We see a flattening of the very short dated IRS curve, which has priced in ‘too much’. Longer rates hinge on the US and Europe, where we expect a modest rise in yields.”

“The pulse of US inflation is a concern and some within the Fed have made the ‘right’ call in pushing back on rate hikes. The FOMC will now probably commence balance sheet reduction in October, but this could put at risk the December hike. The result? A weaker USD, carry continues and other central banks playing down hawkish vibes.”