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5 May 2015
Key events coming up; RBA result leaked? - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank noted the key events coming up starting with the RBA rate decision.
Key Quotes:
"This had looked to be another close call, and the market was split – until, it seems, the RBA leaked its decision in advance again, this time to Peter Martins of the Sydney Morning Herald, rather than Terry McCrann of the local Daily Telegraph (which at least shares the love in terms of which newspaper we need to read to know what the RBA will do in advance)."
"Reading the Martins article that says another 25bp cut is coming today because iron ore prices are slumping (due to a deceleration in Chinese growth), non-mining investment is not picking up (i.e., the new normal), wage growth is low (i.e., the new normal again), AUD is refusing to fall any further because rates are too high (FX wars ahoy!), and that the housing market is better cooled by macro-prudential measures than tight monetary policy, I got a distinct feeling of déjà vu. That’s because it reads almost exactly like the arguments for a rate cut that I’ve been making for over a year now: are the RBA going to deliver more of what I’ve been saying is in order? We shall see in a few hours..."
"In Asia today we also see Q1 GDP from Indonesia, expected at 0.3% QoQ and 4.9% YoY, and so continuing the gradual decline in growth that has been underway for some time now. That is appropriate as the economy, IDR, and overall optimism for substantive reforms under the Jokowi administration seem to be deflating slowly in tandem like a balloon with a hidden leak."
"The US also has trade data today, and the expectation there is for a larger deficit of USD41.7bn. We also see the Markit (i.e., unofficial) and ISM (i.e., official) services PMIsfor April: the former has a consensus of 57.8, unchanged since March; the latter for 56.2, slightly lower than the previous 56.5."
"Now, off to work, quick sharp! Left-right-left-right-left-right! "
Key Quotes:
"This had looked to be another close call, and the market was split – until, it seems, the RBA leaked its decision in advance again, this time to Peter Martins of the Sydney Morning Herald, rather than Terry McCrann of the local Daily Telegraph (which at least shares the love in terms of which newspaper we need to read to know what the RBA will do in advance)."
"Reading the Martins article that says another 25bp cut is coming today because iron ore prices are slumping (due to a deceleration in Chinese growth), non-mining investment is not picking up (i.e., the new normal), wage growth is low (i.e., the new normal again), AUD is refusing to fall any further because rates are too high (FX wars ahoy!), and that the housing market is better cooled by macro-prudential measures than tight monetary policy, I got a distinct feeling of déjà vu. That’s because it reads almost exactly like the arguments for a rate cut that I’ve been making for over a year now: are the RBA going to deliver more of what I’ve been saying is in order? We shall see in a few hours..."
"In Asia today we also see Q1 GDP from Indonesia, expected at 0.3% QoQ and 4.9% YoY, and so continuing the gradual decline in growth that has been underway for some time now. That is appropriate as the economy, IDR, and overall optimism for substantive reforms under the Jokowi administration seem to be deflating slowly in tandem like a balloon with a hidden leak."
"The US also has trade data today, and the expectation there is for a larger deficit of USD41.7bn. We also see the Markit (i.e., unofficial) and ISM (i.e., official) services PMIsfor April: the former has a consensus of 57.8, unchanged since March; the latter for 56.2, slightly lower than the previous 56.5."
"Now, off to work, quick sharp! Left-right-left-right-left-right! "