RBA underlines determination to keep policy loose

The Reserve Bank of Australia this week pushed back against mounting expectations of policy tightening both via its market operations as well as via a dovish speech by Governor Lowe. We reiterate our view that the Bank will unveil a third round of bond purchases by the middle of the year. Meanwhile, the vaccine campaign is off to a slow start in both Australia and New Zealand and we’ve pushed back the likely timing for the reopening of their borders to the end of the year. However, Australia’s vaccination rollout should accelerate over the coming weeks as a locally produced vaccine becomes available.