RBA: Market’s preference for absolute yield remains in evidence - SocGen

Kit Juckes, Research Analyst at Westpac, suggests that the market’s preference for absolute yield remains in evidence after this morning’s RBA meeting.

Key Quotes 

“Yesterday, the market attached a 4% chance to a rate cut. There was indeed no policy change at Governor Glenn Stevens’ last meeting in charge. The policy meeting statement observed that inflation is low, and that an appreciating currency could complicate the economy’s adjustment process but otherwise, was very bland.

I’m not sure the currency would have benefited were it not for the global yield-hunting backdrop. Still, one upshot is a nice AUD/NZD bounce that has further to go in the coming days. Despite the fact that at a whopping 1.86%, New Zealand’s 5year government bond yields are higher than anywhere else in G10.”