Bond traders ramp up early rate cut bets as inflation cools
Bond traders have ramped up bets of early interest rate cuts in Australia after a surprisingly soft quarterly inflation report sealed expectations that the cash rate has peaked and that the next move will be down.
The Reserve Bank of Australia is now considered all but certain to keep the cash rate at 4.35 per cent at this year’s first policy meeting on February 5-6 and bond futures are now fully priced for two quarter-point reductions in 2024, with the first move in August. Earlier this week, they were positioned for only one cut, starting in September.
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