Daily Flows & Insights – RBA Hikes for the Twelfth Time

Daily Flows

  • There was decent flow yesterday considering RBAs decision was pending.
  • In response to the hike, the yield curve has shifted: Cash Rate 4.10%, 3M 4.17%, 6M 4.42% and 1 Yr 4.34%.
  • With a substantial increase across most short end terms, TD and NCD credit margins have had to reprice accordingly.
  • Today, in the BBB space investors should expect to pick up 5.20% from 9 months onwards and 5.15% for ‘A’ rated names in the 1 year.

RBA Hikes for the Twelfth Time

  • The RBA caught the market somewhat buy surprise yesterday, opting to hike a further 25bp taking the cash rate to 4.10%.
  • Market pricing only had 5bp priced in ahead of the meeting while commentators and economists were split on the outcome.
  • Driving the decision was the increasing upside risks to inflation after recent monthly CPI data and the minimum wager decision.
  • As anticipated, the RBA retained their tightening bias which was expected which means the next couple of months will be very interesting.
  • Currently the market is pricing a high probability that the RBA has one more hike left in this cycle.
  • However the timing is very much up for debate.
  • We will do a deep dive in the the latest decision from the RBA and what it means for the outlook in our Monthly Insights next week.
  • Until then, you can see my live reaction to the decision and initial thoughts on the outlook via the link below:


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Curve Team
Jack Pedersen