3 Feb 2015
Key events coming up; Watch RBA - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank noted the key events coming up.
Key Quotes:
"In short, the market is expecting either a 25bp cut from the RBA today, or a statement that makes it clear the same thing will be delivered in March (and with more to come)."
"Regular readers might recall I’ve been of the view that this shift has been coming for some time given the slowdown in China, the weak global backdrop (excluding the US), the persistent refusal of the Aussie economy to rotate away from mining investment into any sector other than housing (i.e., welcome to the ‘new normal’), and, of course, the recent fall in oil prices."
"However, it will be interesting to see how the RBA can sell a cut given they haven’t worried about any of the above much, while recent labour-force data has been very strong (apparently)."I
"ndeed, December’s minutes said “the current accommodative setting of monetary policy was expected to support demand and help growth strengthen at the same time as delivering inflation outcomes consistent with the target over the next two years...[Members] noted that market expectations implied some chance of an easing of policy during 2015 and discussed the factors that might be producing such an expectation.” So not a hint that the markets might be on to something ahead of the Bank itself! However, perhaps the RBA have, unspoken, decided to finally join the currency wars. Recall that despite AUD/USD being lower, in trade-weighted terms it is little changed on a year ago: a cut from the RBA and that will change pretty quickly, however.
"The RBI in India also has a rate decision today, but there is no expectation of another cut from 7.75% following the recent surprise move."
"In the US we have Bullard speaking: he has been all over the place with his commentary direction recently. We also get US factory orders, seen -2.4% MoM (another suggestion of a slow-down?)."
"Apart from that, it’s back to the game of ‘chicken and egg’ in Europe. Just as with our mystery game, the rules of that one also seem to be being made up as we go along, while leaving the potential for a serious mess."
Key Quotes:
"In short, the market is expecting either a 25bp cut from the RBA today, or a statement that makes it clear the same thing will be delivered in March (and with more to come)."
"Regular readers might recall I’ve been of the view that this shift has been coming for some time given the slowdown in China, the weak global backdrop (excluding the US), the persistent refusal of the Aussie economy to rotate away from mining investment into any sector other than housing (i.e., welcome to the ‘new normal’), and, of course, the recent fall in oil prices."
"However, it will be interesting to see how the RBA can sell a cut given they haven’t worried about any of the above much, while recent labour-force data has been very strong (apparently)."I
"ndeed, December’s minutes said “the current accommodative setting of monetary policy was expected to support demand and help growth strengthen at the same time as delivering inflation outcomes consistent with the target over the next two years...[Members] noted that market expectations implied some chance of an easing of policy during 2015 and discussed the factors that might be producing such an expectation.” So not a hint that the markets might be on to something ahead of the Bank itself! However, perhaps the RBA have, unspoken, decided to finally join the currency wars. Recall that despite AUD/USD being lower, in trade-weighted terms it is little changed on a year ago: a cut from the RBA and that will change pretty quickly, however.
"The RBI in India also has a rate decision today, but there is no expectation of another cut from 7.75% following the recent surprise move."
"In the US we have Bullard speaking: he has been all over the place with his commentary direction recently. We also get US factory orders, seen -2.4% MoM (another suggestion of a slow-down?)."
"Apart from that, it’s back to the game of ‘chicken and egg’ in Europe. Just as with our mystery game, the rules of that one also seem to be being made up as we go along, while leaving the potential for a serious mess."