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The AUD rallied sharply early Monday............>

RBA
RBA: The AUD rallied sharply early Monday following the stronger Australian
retail sales data. This leaves the AUD the strongest of the G10 currencies at
the beginning of the week, against a weaker USD. However, the RBA meeting
tomorrow morning is a risk factor. Note that economists' forecasts for RBA rate
hikes have scaled back over the past month. The median of forecasts is for no
hikes in 2018. Economists see a first hike coming in Q1 2019, but forecasts for
a second hike have now been pushed back to Q3 2019 from Q2 2019 previously.
Market pricing is even more cautious with the first hike not fully priced until
June 2019. We also note that in the minutes from the last meeting, the RBA
highlighted that members saw risks to the forecasts in both directions.

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