RBA's Stevens in New York, What was Said?

Morning View:

Overnight in New York City, RBA Governor Glenn Stevens delivered a speech called “The World Economy and Australia” to an American Australian Association luncheon hosted by Goldman Sachs.

“The RBA has clearly signalled a willingness to lower interest rates further.”

“The question of whether interest rates should be reduced has to be on the table.”

Of course statements like this were perceived as AUD negative and the currency sold off, but I can’t help but interpret some of the other things he said as being quite hawkish. You never quite know with central bank rhetoric, but some of these statements to me say that there is a huge chance that the RBA keeps rates on hold again.

“Governments around the world are putting too much weight on monetary policy to try to achieve what it can’t.”

“Any help in boosting sustainable growth from other policies would, of course be welcome.”

Stevens is pushing the government to do more to boost growth in the right areas of the Australian economy but also understands that external factors have a huge impact that Australian monetary policy alone can’t change.

He did include that the RBA were not at the stage where lowering rates was completely useless, but he certainly sounds like keeping cuts up his sleeve for a rainy day is desirable.

A bit of good old jawboning to wrap up the speech, with Stevens saying that he expects the AUD to fall further.

“I’d be a bit surprised actually if it doesn’t go down some more.”

Well Glenn, it’s definitely got room to fall a lot further looking at that chart.

On the Calendar Today:
Stevens speaking in the US last night leads seamlessly into the release of the April Monetary Policy Meeting Minutes. Watch for any clues as to the thought process of the RBA.

We have the German ZEW release during the European session and other than Canadian specific news later in the evening, it’s a pretty quiet day from an economic data release point of view.

Now I say that, watch the night descend into a mess of Greece default headlines and whipsawing price action…

Tuesday
AUD Monetary Policy Meeting Minutes

EUR German ZEW Economic Sentiment
CAD Wholesale Sales

Chart of the Day:
As discussed in the Technical Analysis section of the Vantage FX News Centre, AUD/NZD parity (…and beyond) is well and truly in play after the Stevens speech.

AUD/NZD Daily: