AUD: Timing of Another RBA Rate Cut will Cap Rallies - Westpac
AUD: Timing of Another RBA Rate Cut will Cap Rallies - Westpac
Sean Callow, Research Analyst at Westpac, suggests that the timing of
another RBA rate cut will hang over AUD for some months, capping
rallies.
Key Quotes
“But market pricing of about 20-25% chance for June, 100% by Oct and a
1.35% rate by Mar17 seems sufficient on current information. The RBA
will be braced for a low wages reading though a downside surprise such
as 2.0-2.1% y/y would produce renewed AUD selling.
The jobs report is a lottery as usual though the RBA’s focus does seem
to be inflation, not the pace of growth right now. Commodity prices have
lost some speculative froth but aren’t collapsing, leaving our AUD/USD
fair value estimates in the high 0.70s. We are neutral on the week,
looking for AUD/USD to find buyers in the 0.7261 (200dma) to 0.7300
zone, topside limited to the 0.7450 area.”
