Risk sentiment stabilized in Asian hours, mainly due to the Monetary Authority of Singapore surprisingly easing monetary policy and as it became a notion that the Fed may sound more dovish on monetary policy given moderating inflation expectations. However, several Fed members stressed already that muted price developments are regarded to be transitory and this suggests that today’s FOMC announcement is unlikely to surprise on the dovish side.
In terms of data, the main focus was on CPI in Australia. At 0.7% (cons. 0.5%, prev. 0.4%) the core trimmed mean was released above expectations.
This supports the view of the RBA keeping a neutral monetary policy stance. Although the latest data kept the AUD in demand, we stick to the view that rallies should be sold, in particular against the NZD.
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