RBA monetary policy meeting today (Tuesday 02 March 2021) - preview

Author: Eamonn Sheridan | Category: Central Banks

I posted an earlier preview here: RBA monetary policy meeting Tuesday 2 March 2021 - preview

And also posted on the busy bees at the RBA, buying Australian government bonds to lower yields:
  • The RBA's monetary policy update comes this afternoon and yesterday's QE operation leaves no doubt about its prevailing view. The rates market has been dysfunctional at times, with market participants testing the Bank's commitment to keeping the 3-year rate at 0.1% (to be consistent with its view that the cash rate is unlikely to rise in the next 3 years). 
  • Expect another dovish missive by the RBA, keen on keeping rates suppressed for now and keeping the AUD in check (unsuccessfully so far). There will be some interest in whether the RBA extends YCC through to the November 2024 bond, which would solidify the Bank's commitment to keep the cash rate unchanged for at least three years. Over $1b of yesterday's buying was for this bond anyway, given that the yield trades well above the adjacent April 2024 bond.

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