AUSSIE - AUDUSD: RBA MINUTES HIGHLIGHTS

2016년 9월 20일

RBA minutes broadly neutral on the margin. Aussie rates (30 day bills) are implying a 5% chance of an October 25bps cut. In general we've seen aussie rates firm up, with 30d bills moving from 7% last week and 9% the week before to now 5%, this firming/ steepening has been the general consensus further along the maturity curve where rate cut hopes are diminishing in AUD as speculation regarding a nearing RBA terminal rate/ housing market issues dampening expectations. Feb/ March 2017 is where we see a "dip" in rates or a spike in cut hopes, with there currently being 12/13bps of cuts into these dates - there seems to be an accumulation of institutional macro expectations of an RBA cut in March. Beyond here we see diminishing basis point cuts:time with the May to July differential being only 1bps (from -16bps in May to -17bps in Jun/ July). The driver for AUDUSD will likely be FED/ USD induced. AUD will provide a firm base, but has continued risk of cross selling from AUDNZD as kiwi at 2.00% remains the leading G10 carry trade. Both kiwi and aussie have the ability to push higher and maintain these higher levels if the fed confirms one hike this year, which puts the fed a hike behind the curve.

RBA MINUTES: JUDGED CURRENT STANCE OF POLICY CONSISTENT WITH GROWTH, INFLATION TARGETS

- Steady Decision Took Into Account Rate Cuts In May And August, Recent Data
- Estimated Around Half Of The August Rate Cut Had Been Passed On To Bank Customers
- Repeats Rising A$ Would Complicate Economic Rebalancing
- Decline In A$ Since 2013 Continued To Support Traded Sector Of Economy
- Data Suggest Economy Growing In Line With Potential
- Forward Indicators Consistent With Little Change In Unemployment Rate In Coming Months
- Cost Pressures, Wage Growth Set To Remain Low For Some Time
- Conditions In Established Housing Market Had Generally Eased, House Price Growth Moderated
- High Home Building Approvals Pointed To Significant Amount Of Work In Pipeline
- Economic Drag From Falling Mining Investment Looked To Have Peaked In 2015/16