FXstreet.com (Barcelona) - The board minutes from the October 2 RBA meeting are the highlight of Tuesday’s local Australian calendar. The RBA cut by 25bps to 3.25% at that meeting, so the minutes, according to NAB Strategists, "will again highlight the downside risks to the global economy and evidence of weaker activity data here in Australia."
NAB adds: "The main interest is whether the RBA makes any comment or indication that another easing is coming. Certainly this is how some chose to interpret the weekend comments from RBA Governor Stevens, reported to have said, “On monetary policy, we have ammunition...Unusually for an advanced country, we actually have materially positive interest rates, so if needed we have scope to move there as long as inflation is okay, which at present it seems to be".
The suggestion, in view of NAB, is that "only an unexpectedly high print for core CPI readings next week stands between the RBA and a further rate cut on November 6." Money market pricing for a cut moved out to 83% on Monday from 76% on Friday. The bank thinks that if minutes are perceived as ’dovish’, "it should keep the AUD in check beneath Monday’s highs of 1.0270."
NAB adds: "The main interest is whether the RBA makes any comment or indication that another easing is coming. Certainly this is how some chose to interpret the weekend comments from RBA Governor Stevens, reported to have said, “On monetary policy, we have ammunition...Unusually for an advanced country, we actually have materially positive interest rates, so if needed we have scope to move there as long as inflation is okay, which at present it seems to be".
The suggestion, in view of NAB, is that "only an unexpectedly high print for core CPI readings next week stands between the RBA and a further rate cut on November 6." Money market pricing for a cut moved out to 83% on Monday from 76% on Friday. The bank thinks that if minutes are perceived as ’dovish’, "it should keep the AUD in check beneath Monday’s highs of 1.0270."
