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4 Mar 2015
RBA: Unusual dovish guidance - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, notes that the RBA took the unusual step yesterday of giving clear guidance that a rate cut in likely in coming meetings.
Key Quotes
"The RBA held rates steady yesterday, but took the unusual step of giving clear guidance that a rate cut in likely in coming meetings. There are several RBA speakers in March and the Financial Stability Report."
"The RBA appear comfortable that regulators are containing risks in the property market opening up their scope to cut at least once more. While back-to-back month apart cuts were a bit fast for the RBA board they appear on track to cut in April after the GDP report today was consistent with their sub-trend growth outlook."
"As such, we see downside potential again for AUD/USD and remain bearish AUD/NZD. Counter intuitively strong residential approvals reported yesterday makes the decision to cut easier, as does increased government enforcement of foreign investment in property. Despite the somewhat stronger than expected Canadian GDP report released overnight, risk-reward favours a short CAD position heading into the Bank of Canada meeting tonight."
Key Quotes
"The RBA held rates steady yesterday, but took the unusual step of giving clear guidance that a rate cut in likely in coming meetings. There are several RBA speakers in March and the Financial Stability Report."
"The RBA appear comfortable that regulators are containing risks in the property market opening up their scope to cut at least once more. While back-to-back month apart cuts were a bit fast for the RBA board they appear on track to cut in April after the GDP report today was consistent with their sub-trend growth outlook."
"As such, we see downside potential again for AUD/USD and remain bearish AUD/NZD. Counter intuitively strong residential approvals reported yesterday makes the decision to cut easier, as does increased government enforcement of foreign investment in property. Despite the somewhat stronger than expected Canadian GDP report released overnight, risk-reward favours a short CAD position heading into the Bank of Canada meeting tonight."