Hawkish RBA comments wrong-foot Aussie dollar rates traders
Governor Bullock’s unexpected rate hike talk led to stop-outs and losses
The Australian central bank’s surprise hawkish comments last week wrong-footed rates traders that were betting against a near-term hike, and sparked a dramatic repricing in the swap market, leading to stop-outs and losses.
“I think the repricing was rather brutal,” says an Asia-Pacific rates trading head at a European bank. “Given the way the market moved I think there would have been a few burned hands.”
Only one month ago, the market was pricing in a cut by the Reserve Bank of Australia (RBA) as
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