RBA Expected To Cut Rates On Growth Fears

[DailyFx]

Fundamental Headlines

· USDJPY – The Bank of Japan held the benchmark interest rate steady at 0.50% as the world second largest economy continues to face stagnant growth paired with high inflation. BoJ officials said they expect inflation to peak over the next few months, and expect inflation to ‘moderate gradually thereafter.’ Discuss the topic and your trade ideas in the USD/JPY Forum.

· EURUSD – German investor sentiment rose more than expected to -55.5 from last month’s record low reading of -63.9, in light of falling oil prices and a weakening euro. Amid the unexpected improvement amongst German investors, the current assessment of the economy crossed the wires worse than expected, as the index plunged to -9.2 from 17 in the previous month. Meanwhile, German producer price rose to a fresh record high of 8.9% from 6.7% in June, and may continue to fuel inflationary concerns for the ECB. Discuss the topic and your trade ideas in the EUR/USD Forum.

· AUDUSD – The Reserve Bank of Australia said that they may look to cut the benchmark interest rate ahead of schedule in order to avoid a ‘deeper and more persistent’ slowdown in the $1trillion economy. Record high borrowing costs continues to fuel downside growth risks for the Australian economy, with the central bank stating ‘A case could be made for an early reduction in the cash rate.’ For more news and resources, visit our Australian Dollar Currency Room.

• Fannie Mae, Freddie Mac Are Pounded (link) – Wall Street Journal
• ‘Downstream’ Sellers of Auction-Rate Securities Balk at Prospect of Buybacks (link) – Wall Street Journal
• BOJ Cuts Economic View As Recession Spreads (link) – Financial Times
• Five-Year Swap Spread Tops 100 on Risk Aversion (link) – Bloomberg
• Stocks in Europe, Asia Drop, Led by Banks; US Futures Fall (link) – Bloomberg