RBA Bets Shift Toward Keeping Rates on Hold

Traders are increasingly betting Reserve Bank of Australia chief Glenn Stevens will sit tight on policy for the final six months of his tenure, as a commodities rebound reflects ebbing pessimism in the global economy.

His decade-long stint as RBA governor is coming to an end in September and the swaps market is pricing in just 15 basis points of interest-rate reductions in the coming six months. That compares with 28 basis points as recently as March 9. Although Stevens has acknowledged that benign inflation affords scope to ease again if needed, he hasn’t moved the cash rate from an already record low 2 percent since May last year and has signaled a reluctance to cut again.