Further comments by RBA governor Lowe
- We have done all we can on rates, focus now on QE
- There is not much room between 0% and 0.10% for cash rate
- We are at effective lower bound now
- Outlook for labour market required further policy action even w/o Vic lockdown
- Not targeting 5 or 10-year yields
- But would be helpful if 10-year yields came down further
- If RBA needs to buy more bonds, it will do so
- Under current program, RBA to hold ~15% of government bonds
Well, a few months back they were still insisting there was no "appetite" to even cut below 0.25% but alas, here we are. So, much like the BOE, never rule anything out as there might come a point where the RBA does consider the need for negative rates.
For now though, the focus is on more bond buying as the RBA takes a page out of the BOJ's playbook. AUD/USD is sitting around 0.7045 now and retesting its 100-hour moving average @ 0.7044 after a slight drop earlier following the RBA decision.
