Market yawns at RBA backflip

The Australian Dollar may have popped on the back of the RBA’s latest rhetorical flip-flop (in yesterday’s Minutes) but interest rate markets have given it an almighty yawn.

There was a move in the implied probability for a move at the next meeting:

That’s fair enough but is no real surprise, as I wrote last week. We’ll need more bad data before we see more easing.

As for the one year rate futures, the move was subdued, cutting maybe a third of one cut only:

And implied probability paths for rates in the year ahead remain firmly based around heavy cuts:

That’s a consensus of around 125bps, beginning in September.