Daily Commentary BY THE CURVE TEAM –

RBA Headlines Week Ahead

21st of September, 2020

The end of the first stage of the Term Funding Facility (TFF) and a speech by the RBA’s Deputy Governor Guy Debelle headline the week ahead.

Thus far $64.3 billion of the TFF has been drawn down by ADIs. $84 billion is available in the first round and this week is the final week ADIs can access this first phase.

With a total of nearly $20 billion still available and another $57 billion available from next week to June, it seems likely that not all the initial allocation will be taken up. This is indicative of how accommodating the RBA has made liquidity and funding.

Speculation has occurred this month over whether the RBA will further ease policy despite these already accommodating conditions. The RBA Deputy Governor Guy Debelle will speak on Tuesday, with his speech titled ‘The Australian Economy and Monetary Policy’. Any indication of next month’s policy decision will be looked for.

The speech comes as Victoria’s case numbers continue to improve markedly, with only 11 cases recorded this morning. If Victoria can ease lockdown restrictions quicker than expected, then this could reduce the pressure on the RBA to do more.

Also, ahead this week is payrolls data released tomorrow. Following the strong employment numbers last week, strong payrolls numbers would reinforce the positive outlook for employment.

Preliminary retail sales data will be released Wednesday. The impact from the Victorian lockdown is expected to wane on the numbers.

Trade balance data will finalise the week being released on Friday. The trade surplus decreased last read with export values falling and import values increasing, so whether this continues will be of interest.

Josh Stewart

Client Relationship Manager