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28 Jan 2015
RBA’s scope for joining global easing cycle limited – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, believes RBA’s scope for joining the global easing cycle is now limited after Australian underlying inflation registered a rise.
Key Quotes
“The Australian dollar is the clear out-performer and the actual increase in underlying inflationary pressures in Australia underlines the fact that Australia is certainly not the euro-zone and the RBA’s scope for joining the global monetary easing cycle is pretty limited.”
“Our call was finally balanced on whether the RBA would cut (like Canada, as an insurance) but the trimmed mean and weighted median quarter-on-quarter rates accelerated to 0.7% in Q4.”
“We would still say the RBA rate cut is finely balanced although yields have jumped today as expectations have eased. The 2-year swap rate has jumped 5bps today. The annual rates did all decline and with the RBA conscious of AUD/USD movements, the easing elsewhere globally may still sway the RBA to act against the potential for a deeper slowdown in China.”
“The 10% drop in iron ore prices so far in January may be a more important development in RBA policy deliberations than the slightly higher than expected inflation readings today.”
Key Quotes
“The Australian dollar is the clear out-performer and the actual increase in underlying inflationary pressures in Australia underlines the fact that Australia is certainly not the euro-zone and the RBA’s scope for joining the global monetary easing cycle is pretty limited.”
“Our call was finally balanced on whether the RBA would cut (like Canada, as an insurance) but the trimmed mean and weighted median quarter-on-quarter rates accelerated to 0.7% in Q4.”
“We would still say the RBA rate cut is finely balanced although yields have jumped today as expectations have eased. The 2-year swap rate has jumped 5bps today. The annual rates did all decline and with the RBA conscious of AUD/USD movements, the easing elsewhere globally may still sway the RBA to act against the potential for a deeper slowdown in China.”
“The 10% drop in iron ore prices so far in January may be a more important development in RBA policy deliberations than the slightly higher than expected inflation readings today.”