RBA unlikely to pay attention to a firmer CPI, AUD gains a fade - TDS

Ross J Burland FXStreet

With Aussie CPI coming up, where the headline CPI is expected at +0.5% (TDS forecast +0.6%) and underlying CPI expected at +0.5%, (TDS +0.55%) the analysts at TD Securities (TDS) argued that as the RBA is glued to the sidelines, even our firmer CPI take is unlikely to boost the AUD for long.

Key Quotes:

"Negative rate differentials and ongoing tension on global trade remain significant headwinds. Fading rallies remains prudent."

"The OIS strip is flat to 1.5% cash and no trading opportunities just now. With a patient and gradual RBA, as long as core inflation tracks 2%/y there is no little need for rates to respond. The Aug 15 wages report is the next policy hurdle for the rates market."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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