Daily Commentary BY THE CURVE TEAM –

Daily Insights – Lowe Challenges Market

15th of September, 2021

RBA Governor Lowe Address

  • Disagrees with the implied market pricing of cash rate rises.
  • Market pricing suggests the cash rate will be 0.25% by end of 2022, 0.60% by the end of 2023 and 1% by the end of 2024.
  • These expectations rallied 2-3 points following the speech.
  • Lowe said hot house prices would not influence the RBA’s decision making, unlike New Zealand where house prices have formally been included in their mandate.

NAB Business Survey

  • Confidence improved slightly to negative 5 from negative 7.
  • It is negative in NSW and Victoria and positive in every other state.
  • Conditions rose to 14 from 10.
  • The end of lockdowns, government support and the strength of the economy prior to lockdowns is likely keeping conditions high.

US Inflation

  • Headline was up 0.3% for August, less than the 0.4% expected.
  • Core inflation was up 0.1% for the month, leaving it up 4% on last year.

Josh Stewart

Associate - Money Markets