The benchmark rate is now at 0.75%. Futures imply about a 40% chance of another move to 0.5% next month. A full 25-basis-point cut is priced in by February 2020 with some economists even predicting the risk of unconventional monetary policy. Currencies across Asia were subdued, with China away for holidays. Investors will also keep an eye out for Australia's trade balance, expected on Thursday, and Friday's retail sales numbers.
The New Zealand dollar ticked up from the four-year nadir it hit on Tuesday after data showed the country's business confidence dwindled in the September quarter to its weakest level since September 2015. The broad US dollar pull-back provided mild support to the New Zealand dollar, which was marginally firmer at $0.6248 but still around four-year lows.
New Zealand government bonds were slightly higher, sending yields 4 basis points lower at the long-end of the curve. Australian government bond futures also rose, with the three-year bond contract up 2.5 ticks at 99.390. The 10-year contract added half a tick to 99.035. Investors' focus will be on further communication from the RBA with a semi-annual financial stability review due on Friday, followed by minutes of its latest meeting on Oct.15 and a series of speeches by key RBA officials in coming days.
These "might be seen as starting to convey the RBA's thoughts on the preferred measures for unconventional policy and sequencing, even though the RBA retains an upbeat view for 2020," Tony Morriss, Sydney-based economist for Bank of America-Merrill Lynch.