HONG KONG, Oct 20 (Reuters) - Australian short-term swaps rose to 11-month highs after minutes from the central bank showed the bank had shifted its focus to inflation while a flattening in the New Zealand swap curve revealed sharp rate rise fears.
* One year Aussie swap rates to a high of 4.9 percent, highest since November last year, after minutes from the Oct. 6 meeting showed that board members felt it could be "imprudent" to maintain a very expansionary policy setting for a long time as it could fuel inflationary pressures.
* At the meeting, the central bank raised its key cash rate to 3.25 percent from a record low of 3.0 percent, surprising many economists and highlighting the resilience of the local economy.
* Implied money market rates are now pricing in a 30 percent chance of a 50 bp hike in November, with a 25 bps increase fully priced in.
* "Today's notes suggest they are not considering 50 bp rate hikes and will continue to normalise rates in 25 bps steps at least initially," said Adam Carr, senior economist at ICAP.
"Some on the board remain concerned about the ability of the economy to continue improving in the absence of fiscal stimulus. October was a close call, there is no suggestion they were falling over each other to raise rates," he said.
* Money markets now expect local rates to climb 216 bps over the next 12-months, according to a Credit Suisse index, which had factored in rate hikes of only 167 bps just two weeks ago.
* In New Zealand, where money markets were spooked last week by a surprise jump in inflation, swap rates climbed further amid growing expectations the central banks would follow its Australian counterpart in raising interest rates.
* Those expectations are reflected in the faster rise in the short term swaps relative to the rise in longer contracts which saw the curve flatten.
* "The obvious culprit for this pre-emptive flattening is the strength of the sell-off in the two-year rate," said Deutsche Bank strategist David Plank, adding that longer terms rates were capped on views most major central banks were expected to keep rates low for some time.
* The one-year interest rate swaps have risen nearly 30 bps this month to 3.59 percent. The 10-year swaps are unchanged at 6 percent compared with end-September.
* In Singapore, three-month dollar funding was at 0.29143 percent, unchanged for a third straight trading day. (Reporting by Umesh Desai; Editing by Kazunori Takada)