Lowe Speech/RBA Mins In Focus, AUD Falters Ahead of 0.7000

The post Asia close saw the AUD rebound run out of steam just ahead of 0.7000. We fell back below 0.6950, but start today just above this level.

• Risk appetite signals in equities were positive, albeit in a holiday disrupted overnight session. EU equities firmed, while US futures were up +1% for both the S&P500 and Nasdaq on closing levels from last Friday.
• Commodities were mixed, with Brent crude pushing back above $114/bbl, but iron ore remained around yesterday's lows of $110-$111/tonne. A measure of base metals slid further as well.
• The focus today will be firmly on the RBA. Early up is the RBA's review of its yield target.
• This is followed by an RBA Lowe speech on the Economic Outlook and Monetary Policy. Then the RBA minutes for the last policy meeting are due.
• Recall last week Governor Lowe gave a TV interview where he stated inflation will rise to 7% before year end and a cash rate to 2.5% is a reasonable assumption.
• The focus is likely to rest on any insight around the size of the next RBA hike at the July policy meeting. i.e. would the RBA consider going larger than 50bps. The other area that could be in focus is the terminal rate path, particularly as market pricing looks for a 4% handle into 2023.