RBA: No surprises in the June Minutes – BBH

The minutes from the Reserve Bank of Australia's recent meeting were released today and there were no surprises, according to the research team at BBH.  

Key Quotes

“It recognizes the risk combination of high levels of household debt and weak wage growth.  The RBA stance remains neutral.  Moreover, since the RBA met on June 6, the country reported a constructive--even if overstated due to sample changes--employment report.  The unemployment rate fell to 5.5% from 5.7%.  Four-times more jobs were created than the median in the Bloomberg survey forecast and 52k full-time jobs were created.”

“The Australian dollar remains firm.  Even Moody's decision to downgrade the four large Australian banks failed to push the Aussie out of its recent range.  Potentially it appears to be like a spring coiling.  In recent sessions, it has built a base in the $0.7570-$0.7580 area and has been making slightly lower highs for the past few sessions near $0.7630.”

“Beginning on June 9, the Aussie has been moving in a saw-tooth fashion alternating between advancing and declining sessions, though it has appreciated about a cent over this period.  We suspect it has been carving out a continuation pattern, meaning that the consolidation may resolve itself with a push higher.  However, this will likely further extend the stretched technical indicators, suggesting that participants ought to be careful, and the next leg up could represent the end of the move that began last month near $0.7330.”