Daily Flows & Insights – Lowe Addresses RBA Shakeup

Daily Flows

  • With 6 month – 1 year reference rates climbing off the back of RBA meeting minutes, 1 year term deposits have cracked 5%.
  • This level has not been offered since pre SVB bank collapse.
  • Middle market investors have been quick to act as incoming data may shift market expectations and put downward pressure on longer term TDs.
  • With the dust having settled from overseas liquidity concerns, demand for credit has returned. A number of bond maturities has seen a pick up in activity directed to new Semi-Govie and Govie maturities.
  • NCD space continues to return to two way flows, with a bid tone still setting a rate of +40 for 3 months.

Lowe Addresses RBA Shakeup

  • Governor Lowe appeared before the media yesterday to discuss the review into the RBA and the 51 recommendations that were handed down
  • While it was interesting to listen to, we didn’t learn a whole lot more than was already released prior to his appearance.
  • The market is now working through the ramification of some of the changes, should they all be adopted.
  • One thing will be adjusting to the rhythm of 8 meetings a year as opposed to 11, given the current meeting schedule dovetails nicely with the data schedule and RBA releases such as the Quarterly Statement on Monetary policy
  • New communication structure and frequencies will be something new and how the RBA maintains their core messaging through this shift will be something worth watching.
  • There will also be some tweaking of their mandate which could result is a shift in the balance of focus between inflation and full employment, potentially impacting the driving forces behind the precise calibration of policy settings.
  • Fortunately there will be plenty of time to assess these impending changes over the coming 12-18 months.


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Curve Team
David Flanagan