(Bloomberg) — A jumbo wager on an Australian interest-rate cut has emerged again, stoking speculation the same trader is hoping to strike gold at the third attempt.
A splurge of buying has seen open interest in Australia’s April bank bill futures jump almost 30 percent so far this week to the highest since May 2016, suggesting sizable new longs are being built. The trade matches a pattern seen in the run-up to the Reserve Bank of Australia’s previous two policy meetings. The central bank’s next policy decision is on April 2.
Total trading volume jumped to almost 32,000 contracts during Wednesday’s buying fest, before falling back below 3,000 so far on Friday.
Assuming one player bought 30,000 contracts on Wednesday, they would stand to lose about A$740,000 ($524,000) if policy makers sit on their hands on April 2. If the RBA cuts rates however, they would pocket a cool A$17 million.
(Updates numbers in second paragraph, adds possible return in fourth.)
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