Australia’s 10-year bond rate is back near the all-time lows it traded at last week after the British EU referendum in the wake of weaker than expected retail sales data and the decision by the RBA to leave the cash rate at 1.75%.
It seems like bond traders read the final paragraph of RBA governor Glenn Steven’s statement this afternoon as dovish. David deGaris, NAB senior economist, told Sky Business that while it wasn’t an explicit easing bias, it certainly caught the NAB team’s attention.
At the end of his statement Stevens said:
Over the period ahead, further information should allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate.
The implication being read into it is that the July 27 release of the second quarter CPI for Australia could be the “further information” the RBA needs to cut rates.
A short time ago the 10-year Australian Commonwealth Government bond was trading at 1.936% just 1.5 points above its all-time low.