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RBA defies calls for a rate cut, boosting.....>

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FOREX: RBA defies calls for a rate cut, boosting AUD
-Analysts were split on the RBA rate decision overnight, with close to half
seeing a 25bps cut. Nonetheless, the RBA squashed those looking for lower
policy, holding rates for at least one more meeting cycle. AUD/USD rallied back
above the $0.70 handle but found it difficult adding to gains above $0.7050.
Markets still see RBA policy as a matter of when, and not if, the bank cut
rates.
-JPY has gained modestly against most others in G10 as traders remain cautious
over the prospects of elevated tension between the US and China. Trade
negotiations are back on schedule, with the Chinese vice premier due in
Washington on Thursday and Friday this week. Any delay to this meeting would be
seen as risk negative, with US equity futures already adding to yesterday's
losses. The DXY trades largely flat after modest weakness in the European
morning was erased ahead of the US crossover.
-Focus turns to Canadian Ivey PMI and speeches due from Fed's Quarles & Kaplan
and BoE's Haldane & Cunliffe.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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