key event: RBA Governor Lowe speaking: next move is more likely to be up


The Reserve Bank of Australia Governor Lowe is speaking today and appearing in front of parliament's House of Representatives' Standing Committee on Economics from 2230 GMT. He is delivering a prepared text and then will be taking questions.

  • RBA Lowe: improvement to global economy has continued
  • RBA Lowe: next move is more likely to be up.
  • RBA Lowe: labour market notably stronger than expected.
  • RBA Lowe: global trade and commodity prices helping the economy.
  • RBA Lowe: less monetary policy will be appropriate in the future.
  • RBA Lowe: expects GDP above 3% in 2018 and 2019.
  • RBA Lowe: progress is steady but gradual.
  • RBA Lowe: the economy has been moving in the right direction.
  • RBA Lowe: mid point of target range has been reached.
  • RBA lowe: one uncertainty is consumer spending.
  • RBA lowe: wage growth to pick up but is likely to be gradual.
  • RBA Lowe: continue to look at household balance sheets has been some containment of the build-up of risk.

Key notes: 

DXY: how low can you go; 85 here we come?

The US dollar is has been testing the YTD lows and down -0.61% at the end of the day having traded between a range of 88.558 - 89.004.

FED funds rate to exceed RBA rate by 112 bp’s 10 year spread to minus 30bp’s by 2019 - Westpac

Bill Evans, Research Analyst at Westpac, suggests that they have increased their likely peak in the Federal Funds rate to 2.625% in response to Congress’ recently announced spending package.

RBA: No strong case for a near-term adjustment in monetary policy - Westpac

The Reserve Bank Board next meets on March 6 and in a speech on February 8 the Governor concluded, “the Reserve Bank Board does not see a strong case for a near-term adjustment in monetary policy”, notes Bill Evans, Research Analyst at Westpac.

RBA: what are the upside risks? - Nomura

Analysts at Nomura offered a review on the latest developments in the RBA's policy and main downside/upside risks.

About the Lowe and the RBA

Philip Lowe replaced Glenn Stevens as governor of Australia’s central bank. Lowe was the Deputy Governor of the Reserve Bank of Australia, a position he held since February 2012. If the RBA is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

 

 

 

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