Money markets in antipodeans: RBA to cut? - Westpac

Analysts at Westpac offered the outlook for money markets in the antipodeans.

Key Quotes:

"AU swap yields 1 day: The 2yr should open around 1.73% while the 10yr should open around 2.16%.

AU swap yields 1-3 month: If the RBA cuts to 1.5% as we expect, then the 2yr should eventually find a base around 1.7%. However the main risk is that markets expect a sub-1.5% cash rate.

NZ swap yields 1 day: NZ 2yr swap rates should open 1bp higher at 2.06% while the 10yr should open unchanged at 2.47%.

NZ swap yields 1-3 month: Slightly lower. The OCR should be cut to 2.0% in August, but the risks are it could fall further later on, which means the 2yr could test 2.00%."