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3 Mar 2015
Key events coming up; RBA in focus - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained the day ahead and key events.
"Today we have already seen a series of Aussie numbers that suggest the RBA will cut 25bp again today to take rates to a new low of 2.0%. Building approvals soared 7.9% MoM and 9.1% YoY, but that is adding to housing supply, something that the RBA have recently stressed is the best way to deal with rising prices (better, for some reason, than not letting people borrow ridiculous multiples of income and so pushing prices up). At the same time net exports added 0.7% to Q4 GDP, a tick higher than expected, but not really outweighing the huge drag we will see from inventories based on the numbers already released."
"In short, the picture is of a slowing Aussie economy, rising housing supply, and an indication as to where the exit from that conundrum best lies – in the metaphorical form of Hugh Jackman leaping on stage in an AUD costume and belting out “Yes I caaaaaaaaaaaaaan!” in his best Oklahoma (not Wolverine) style."
"Indeed, the next focus today is that RBA rate decision. While there are obviously strong arguments that the last thing that the hyperbolic Aussie housing market needs is a further rate cut, with AUD at 0.7760, and far too strong on a trade-weighted basis, it will arguably take more action from the Reserve Bank to help warm up Mr. Jackman’s dulcet vocal chords."
"Today we have already seen a series of Aussie numbers that suggest the RBA will cut 25bp again today to take rates to a new low of 2.0%. Building approvals soared 7.9% MoM and 9.1% YoY, but that is adding to housing supply, something that the RBA have recently stressed is the best way to deal with rising prices (better, for some reason, than not letting people borrow ridiculous multiples of income and so pushing prices up). At the same time net exports added 0.7% to Q4 GDP, a tick higher than expected, but not really outweighing the huge drag we will see from inventories based on the numbers already released."
"In short, the picture is of a slowing Aussie economy, rising housing supply, and an indication as to where the exit from that conundrum best lies – in the metaphorical form of Hugh Jackman leaping on stage in an AUD costume and belting out “Yes I caaaaaaaaaaaaaan!” in his best Oklahoma (not Wolverine) style."
"Indeed, the next focus today is that RBA rate decision. While there are obviously strong arguments that the last thing that the hyperbolic Aussie housing market needs is a further rate cut, with AUD at 0.7760, and far too strong on a trade-weighted basis, it will arguably take more action from the Reserve Bank to help warm up Mr. Jackman’s dulcet vocal chords."