Nomura analysts have put out a research......>

AUSSIE: Nomura analysts have put out a research piece on the AUD and note while

there have been improving signs across the domestic economy, particularly in the

labour market, AND the growth outlook has improved, the RBA is in no hurry to

shift the policy dial. The limited inflation pressures, as illustrated again by

the benign Q3 CPI and details which show a rising proportion of the basket is

growing by less than the bottom end of the RBA's 2-3%pa target band, support our

call for the RBA to remain patient.

- Nomura add, "this suggests the bias is for the market pricing for the start of

the tightening cycle that has built up over recent weeks to be pared back." We

think these diverging impulses should see "relative market interest rate

expectations shift in favour of a higher GBP/AUD." Signs the China property

market is cooling, coupled with the push by policymakers for further supply-side

reforms and deleveraging, lingering supply concerns look set to exert further

downward pressure on key Australia-centric commodity prices such as iron ore

into year-end. With positioning measures continuing to show Leveraged

participants are long AUD, this should keep a broad rebound in the ccy at bay.