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22 Oct 2015
RBA rate cut talk lingers - Westpac
FXStreet (Guatemala) - Sean Callow, Sydney, Westpac Global Markets Strategy Group explained still, it is understandable that markets prefer to lean towards further RBA easing, given the ongoing deceleration in China and related commodity outlook discussed above.
Key Quotes:
"Australia’s Q3 CPI (Wed) should see 6 month annualized core inflation ease to just 2.1% y/y, meaning inflation is no barrier to further easing, should 2016 growth prospects worsen. This should leave AUD/ USD firmly capped on rallies towards 0.7350/0.74 multi- day, but probably finding buyers around 0.7100.
As for broader USD sentiment, a crowded week includes US Q3 GDP which we see likely to surprise to the downside and an FOMC statement which shouldn’t sway the weight of money positioned for no hike in Dec. If the Bank of Japan holds steady as we expect then USD/JPY could have a difficult week. But given the outlook for Japan and the Eurozone into 2016, the US dollar should regain its role as the most appealing G3 currency."
Key Quotes:
"Australia’s Q3 CPI (Wed) should see 6 month annualized core inflation ease to just 2.1% y/y, meaning inflation is no barrier to further easing, should 2016 growth prospects worsen. This should leave AUD/ USD firmly capped on rallies towards 0.7350/0.74 multi- day, but probably finding buyers around 0.7100.
As for broader USD sentiment, a crowded week includes US Q3 GDP which we see likely to surprise to the downside and an FOMC statement which shouldn’t sway the weight of money positioned for no hike in Dec. If the Bank of Japan holds steady as we expect then USD/JPY could have a difficult week. But given the outlook for Japan and the Eurozone into 2016, the US dollar should regain its role as the most appealing G3 currency."