Depth of rate cuts matters more for markets than timing

Although the Reserve Bank of Australia – which left policy on hold today – looks set to be the last developed market central bank to join the easing cycle now underway among developed economies, we think more important for long-term bond markets than the exact timing of rate cuts is how deep those cuts ultimately are. On that front, Australia doesn’t look like too much of an outlier to us, although there is at least one candidate among the G10 for a bigger move in bond yields.