Chatter in the fixed income market is at DEFCON 1 following Reserve Bank Governor Philip Lowe’s lunch on Thursday at the investment bank.
, which pushed the three-year bond rate up 8 basis points and was felt along the entire yield curve.
RBA governor Philip Lowe addressed a lunch at investment bank Barrenjoey on Thursday, which moved the Australian bond market.Thursday’s private briefing was also held in the context of an information vacuum created by the RBA. Lowe declined to make a public address last week, an engagement he has carried out during the first full week of February in every other year since he became governor.
Such an outcome would be way outside consensus market thinking. Even after the hawkish RBA statement accompanying Tuesday’s decision, nobody has really contemplated the spectre of an RBA cash rate with a 5-handle.On Sunday, an RBA spokeswoman denied that Lowe had said this at the briefing; and that rather, he had said that “one of the issues he’s working through is the differences in interest rates across countries”.
Lowe knows this. Perhaps it is ill-advised at this juncture to be communicating behind closed doors on a Chatham House basis. Perhaps it was injudicious of Lowe, first, to withdraw information supply versus prior periods and then, second, to place himself in a position to be misinterpreted.
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