Cash Rates up by 2023? Not bloody likely

The impressive recovery in the Australian labour market has brought forward expectations for the timing of the RBA’s first cash rate hike. Earlier this month, the RBA indicated that it did not expect cash rates to rise ‘until 2024 at the earliest’ and remained committed to a 3-year government bond yield of 10bps. However, a surprising employment growth outcome for March, which was subsequently announced, left the market questioning the strength of its convictions. We believe that the conditions required to shake the RBA’s convictions remain unlikely to emerge.