Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – RBA Review, RBA Minutes

Wednesday, 20th July, 2022

Daily Flows

  • Flows remained strong as investors took advantage of the increase in reference rates, particularly in the longer end of the curve.
  • Investors were rewarded with a 4.45% 1Yr from a BBB rated ADI. A margin of more than 100 basis points above the reference rate.
  • Strong flows remained into NCDs with BBSW continuing to provide generous returns. Today is looking likely to continue that trend as 3 month BBSW looks to break 2.20%.

RBA Review

  • The panel has been set for the independent review of the RBA.
  • Elected onto the panel is Carolyn Wilkins, Renee Fry-McKibbin and Gordon de Brower.
  • The review will encompass all things RBA including tools used, policy implementation, structure, accountability and even culture.
  • March 2023 is the timeframe that the review will be completed.

RBA Neutral Rate

  • Yesterday’s monetary policy minutes highlighted that the neutral rate will be above the 2010 average.
  • In 2010 the average was 2.60%. However, the minutes provided no clear indication of how quickly this rate will be achieved.
  • The next two weeks will be telling, with the Fed meeting next week and Australia’s Q2 CPI bering released on the 27th.
  • Philip Lowe is addressing the Australian Strategic Business Forum, with a speech titled “Inflation, Productivity and the Future of Money”. This will be widely watched to see if there are any hints as to where the RBA may be headed.

Nicholas Allan

Curve Team