Published at 05:01 (GMT) 19 Apr

AUD/SGD, AUD/USD Flows: Aussie eye 1.02 Options, PM Gillard to call for RBA cut (LZEC4601)

AUD/USD dipped to day lows of 1.0350, with more calls for RBA to cut rates - not least from PM Julia Gillard herself (see earlier RBA flows, WSJ). Focus now on the quantum of the RBA cuts - whether it will be 25bps or 50bps. The independent RBA could go for 50bps - citing increased concerns over eurozone debt crisis - and also on lower Q1 CPI due on April 24 next week.

Markets pricing in -95bps of RBA cuts over the next 12-months. Good to watch for any increased in rate cuts expectations as markets face uncertainty over Spanish auctions, borrowing costs today. French EUR11bln 2-6 year bond auctions and French Presidential election - first round on Sunday April 22, second round on May 6. Hearing lots of huge stoploss in AUD/USD building below 1.0340/1.0300 handle. Focus still on the 1.0200 option barriers - below the recent 3-month lows of 1.0226, after the 1.0230 was taken out. AUD/SGD at 1.2970-75, eye break of 1.2890-00 for 5-month lows again on combo of RBA cuts expectation + hawkish MAS. USD/SGD at 1.2525-30, offers at 1.2530-50 current levels, but hearing UK clearers, and local banks now paying on dips below 1.2480-90, with large money center bank US banks. WL