Risk Assets continue to shrug off political angst while reacting positively to coronavirus lockdowns being eased across the globe. The sublime level of policy support makes it increasingly challenging to argue the relevance of rabble-rousers looting Target (NYSE:) Stores in the US, let alone the market impacting significance of Cold War 2.0.
The was mostly a non-event for risk markets.
The RBA held the policy rate as expected, with the still deteriorating labor markets likely deterring any possibility of a hawkish surprise even as the Australian economy recovers faster than anyone could have thought. Instead, they opted to unalter the policy stance, which is far less dovish than global peers anyway.
While holding the cash rate and the 3y ACGB yield at 0.25%, the RBA pushed back against the idea of negative rates. And at the same time, the central bank might also be sending a powerful message about the prowess of their yield curve control mechanism. Indeed, the RBA has managed…