Daily Flows

• Volume in QTC FRN lines traded ranged from 2027 to 2029.
• A short-term rate of 4.85% for 5-month term deposits has seen inflows ahead of the RBA meeting.
• Similarly, at the longer end of the curve, offerings above 4.95% for 4- and 5-year term deposits have been quickly taken up.

RBA Today

• The much-anticipated February RBA meeting is set to take place today, with all major banks forecasting a rate cut, while market pricing currently reflects an 87% probability.
• Regardless of the decision, the RBA press conference and accompanying statement will be crucial in shaping market expectations for future monetary policy.
• Given that the labour market remains tight and there are signs of consumer demand recovering, a hawkish or neutral statement would result in minimal adjustments to the yield curve.
• Conversely, a dovish statement that signals further easing would likely trigger a strong rally in rates, as this outcome is not currently priced in.