AUD: Bulls Beware; Market Expects Too Much From RBA

A new month brings a new RBA decision as the Aussie is struggling despite an upbeat Chinese figure. What can we expect or not expect from the RBA?

Here is their view, courtesy of eFXnews:

ANZ Research notes that following the surprising tilts from the ECB, BoE, and BoC last week, the market is on the hunt for hawkish RBA surprise this week.

“We do not agree with the view that there is a globally coordinated shift in policy taking place, and we do not think that the RBA is on the cusp of shifting its bias.

The starting point for the RBA is different. The degree of slack in the Australian economy gives the RBA time, and the starting point, while historically low, is also well above that of the other central banks. The BoE and ECB are starting from a point of unconventional policy, while the BoC is starting with a policy rate of just 0.5%, a full percentage point below that of Australia,” ANZ argues.

“We think the RBA is comfortably on hold and will not want to send a signal to the contrary. AUD bulls beware,” ANZ warns.