AceTraderForex Jun 17: Intra-Day Market Moving News,Views & data to be released today

Trading Discussion Currencies
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[B]Intra-Day Market Moving News and Views

17 Jun 2014[/B] [I]01:31GMT[/I]

[B]AUD/USD [/B]- RBA releases minutes of its June’s policy meeting (the minutes said to keep rates low amid uncertain outlook) :

  1. significant recovery underway in home building, non-mining investment still subdued.

  2. liaison with retailers suggested sales growth slowed further in may.

  3. noted sharp fall in surveys of consumer confidence, doubted their predictive power.

  4. spare labour capacity to keep wage growth restrained over the year ahead.

  5. lower iron ore price still profitable for Australian miners, not so for some others.

  6. demand for labour had improved, but employment growth likely to be only moderate.

  7. economic growth to be below trend for next year or so, inflation within target band.

  8. repeats a$ high by historical standards, especially given fall in commodity prices.

  9. these “uncertainties” would likely take some time to resolve.

  10. difficult to judge if low rates enough to offset mining investment, fiscal tightening.

  11. policy likely to stay accommodative for some time yet.

The aussie falls after the minutes as the tone is interpreted on the dovish side.

[B]Data to be released on Tuesday: [/B]

Australia RBA meeting minutes, Switzerland producer/import price, Italy trade balance, U.K. CPI, PPI, RPI, euro zone ZEW economic sentiment, Germany ZEW economic sentiment, ZEW current conditions, U.S. CPI, housing starts, building permits. FOMC begins 2-day meeting.

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[B]Intra-Day Market Moving New and Views

15 Jul 2014 [/B] [I]01:29GMT[/I]

[B]AUD/USD[/B] - Statement just released by [B]RBA[/B] minutes of its July 1st monetary policy meeting, quote :

1 on present indications, prudent to have period of steady rates;
2 repeats A$ high by historical standards, particularly given drop in commodity prices;
3 A$ offering less assistance to the economy than it might otherwise;
4 board noted NZD and CAD also high, were most surprised by low level of US dollar;
5 members agreed was difficult to judge if low rates would offset mining, fiscal drag;
6 further substantial falls in mining investment expected, public demand to be weak;
7 economic growth seen a little below trend over coming year, inflation in target band;
8 significant amount of monetary stimulus already in place to support economy;
9 RBA saw some improvement in labour market, only moderate jobs growth expected;
10 household consumption had eased, liaison suggested retail sales little changed from may to June;
11 strong growth in home building expected, non-mining investment rising gradually;
12 labour costs subdued, members noted productivity had improved across economy.

AUD briefly dipped to intra-day low of 0.9384 b4 rebounding to 0.9402 after the minutes were released as Reuters headline:
“Australia c.bank sets steady course for rates amid economy doubts” suggests no rate cut will be made any time soon.

Next RBA meeting will be on Aug 5.

[B]Data to be released on Tuesday: [/B]

Australia RBA minutes, Japan BoJ rate decision, Swiss PPI, UK BRC retail sales, CPI, PPI, PPI input, PPI output, RPI, core RPI, Italy CPI, Germany ZEW current conditions, economic sentiment, U.S. retail sales, export prices, import prices, Redbook retail sales and business inventories.

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[B]Intra-Day Market Moving News and Views

22 Jul 2014[/B] [I]05:00GMT[/I]

[B]NZD/USD[/B] - 0.8678...  RBNZ Deputy Governor Spencer said, quote:

‘Reserve Bank of New Zealand to review prudential rules for banks, non-bank lenders;
review to “thin stock” of current regulation, won’t be ‘a severe pruning’; banking review to take 12 months, may remove redundant rules, simplify framework;
review will not include rules covering insurance sector; key planks such as capital adequacy, liquidity, risk management, governance not in review.’

[B]AUD/USD[/B] -   Earlier Statements from RBA Governor Glenn Stevens continues to speak and said "markets remarkably sanguine on geopolitics up to now.

'low rates are doing the things they usually do; doing all that could reasonably be expected at moment, content for now; if policy could reasonably do more, would consider it.'
He began his statement, quote:
“hard to say how successful qe has been globally”;
“subdued ‘animal spirits’ likely one reason for slow economic recoveries”;
" is sure spirits will improve at some point, G20 growth agenda could help".

Stevens makes no comments on domestic monetary policy & A$ in his speech. Aud briefly bounced to intra-day high of 0.9395 as st specs sold aussie ahead of Stevens’ speech n quickly covered their shorts after his speech did not mention the A$.

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[B]Intra-Day Market Moving New and Views AUD/USD

07 Aug 2014[/B] [I]01:34GMT[/I]

[B]AUD/USD -[/B] .... Aussie tanks after Australian jobless rate in July climbed sharply to 6.4% vs forecast of 6.0% whilst employment change came in at -300 vs street forecast of a +12K job growth. The pair tumbled fm 0.9355 to 0.9302 after the data shock.

Last night, U.S. President Obama said: 'can’t solve entire corporate tax inversions problem administratively, but looking for ways to interpret statutes to discourage use of loophole; would prefer congress pass law end inversion loophole but White House reviewing all its options on the issue; we don’t want to see this trend grow on inversions, so wants to move quickly on the issue.'
He also said ‘Russian economy has “ground to a halt” as result of U.S. and European sanctions; supports ceasefire negotiations talking place in Egypt, wants to make sure that current temporaty truce holds.’

News from Reuters, Russia’s veterinary service to ban all U.S. agricultural products and all EU fruit, vegetable imports - RIA news agency says, citing the service.

[B]Thursday[/B] will see the release of Australia’s unemployment rate, Swiss consumer confidence, German industrial output, Bank of England rate decision, eurozone rate decision, Canada’s Ivy PMI and building permit.

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[B]Intra-Day Market Moving New and Views

08 Aug 2014[/B] [I]01:33GMT[/I]

[B]AUD/USD [/B]- ... News on Reuters, the RBA releases its quarterly monetary policy report, qoute:

Australia c.bank repeats outlook likely to be period of stability for interest rates;
RBA sees economic growth little below average over 2014/15, above average thereafter;
RBA trims GDP forecast for end 2014 to 2.5 pct vs 2.75 pct, lowers forecast band for 2015;
Underlying inflation for end 2014 seen at 2.25 pct vs 2.5 pct, 2.25-3.25 pct for end 2015;
Removal of carbon tax to lower CPI by 0.75 ppt, underling inflation 0.25 ppt in 2014/15;
Jump in July unemployment might be partly due to survey changes, sample rotation;
Unemployment rate likely to remain elevated for some time, not decline until 2016;
Slack in labour market, improved productivity to keep domestic costs contained;
A$ high by historical standards, fall in terms of trade mean A$ could drop over time;
Falling mining investment, fiscal consolidation to drag on economic growth;
Growth supported by strong resource exports, low rates, upswing in home building;
Sees pick up in China aided by policy stimulus, expects Beijing to meet 7.5 pct 2014 target.

6

[B]Intra-Day Market Moving News and Views AUD/USD

20 Aug 2014[/B] [I]02:39GMT[/I]

[B]AUD/USD[/B] - ... The Aussie chopped around after RBA Governor Glenn Stevens' testimony b4 the House of Standing committee ahead of Asian open, short-term specs were selling the AUD after NY close but when Stevens did not jawbone the Aussie lower, shorts covered their positions and lifted price on 0.9318.

Below were Stevens testimonies released on Reuters :

-remains view that on most metrics would be surprising if A$ remains so high
-risk of A$ fall is under appreciated
-puzzled why u.s. dollar is not higher given u.s. is recovering

  • intervention on A$ part of tool kit if thought useful
    -have not considered intervention useful so far
    -would not want to give advance warning if did consider intervention
    -economy does not need draconian fiscal tightening right now
    -budget problems are in the medium term
    -recent reading on unemployment was a weak one, difficult to interpret
    RBA’s Kent says unemployment not to fall sustainably until late 2015,
    early 2016
    Stevens continued - A$ high in part because global capital finds Australia attractive
    -has not thought about raising rates
    -says expects fairly subdued result for Q2 QDP
    -have not felt that intervention would work at current A$ levels
    -would consider lower rates if thought it would be helpful
    -but does not think interest rates the answer right now

[B]Wednesday[/B] will see the release of RBA’s Stevens testimony, Japan’s exports, imports and trade balance, Australia’s Westpac leading economic index, Japan’s all industry index, Germany’s producer prices, BOE’s meeting minutes and CBI trend, Canada’s wholesale trade and U.S. FOMC minutes.

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[B]Intra-Day Market Moving New and Views [/B]

[B]03 Sep 2014[/B] [I]04:09GMT[/I]

[B]AUD/USD[/B] - .... RBA Governor Glenn Stevens' speech in Adelaide, quote:

‘not in position to change stance on policy stability;
A$ above most metris of fair value;
Australian assets still remain attractive to foreign investors;
foreign demand major reason why A$ remains high.’

he said that: not in position to change stance on policy stability;
A$ above most merits of fair value;
Australian assets still remain attractive to foreign investors;
foreign demand major reason why A$ remains high.

-Stevens says policy must avoid build up of financial sector risk

  • would be unwise to further inflate high house prices with rates
    -best thing rba can do for economy is to run an accommodative policy and rates are very low
    -has made clear his views on relatively high a$, won’t repeat them
    -unemployment rate is “concerning”, though clouded by data distortions
    -labour market has degree of spare capacity, some time before unemployment falls
    -taking gdp for q1 and q2 together, points to moderate growth
    -signs are growth continuing in current quarter
    -data show further upgrading of non-mining investment, like to see more
  • business balance sheets healthy, well placed to increase investment
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[B]Intra-Day Market Moving New and Views

16 Sep 2014

AUD/USD[/B] - the RBA releases its minutes :

-most prudent course likely to be a period of stability for rates
-policy must take into account risk of further large build-up in home prices
-members observed additional speculative demand could amplify property price cycle
-members noted there had not been a general easing in mortgage lending standards to date
-members judged current policy stance contributing to sustainable growth
-A$ remained above most estimates of its fundamental value
-iron ore prices had declined noticeably over the past month
-signs of pick up in labour demand, but some time before jobless rate declined consistently
-mining investment little changed in Q2 but should fall significantly over the next year
-degree of spare capacity in labour market apparent in the slow growth of wages
-recent Chinese data consistent with official GPD target of 7.5%
-conditions in China’s residential property market remain a risk to outlook for China

[B]Tuesday [/B]will see the release of Australia’s RBA meeting minutes, U.K. CPI, PPI and RPI, Bank of England quarterly bulletin, Germany’s ZEW current conditions and economic sentiment, U.S. core PPI final demand, Canada’s manufacturing sales, U.S. Redbook and overall net capital flows.

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[B]Intra-Day Market Moving New and Views

24 Sep 2014[/B] [I]01:31GMT[/I]

[B]AUD/USD[/B] -.....   RBA releases Financial Stability Review:

‘discussing with apra further steps to strengthen bank lending standards;
APRA has already intensified supervision of mortgage lending;
composition of housing and mortgage market becoming “unbalanced”;
bank competition driving strong rise in loans for housing investment; speculative demand could amplify house price cycle, risk eventual sharp reversal;
risks from housing cycle mostly macroeconomic, could become systemic if loan growth persists;
important that Australian banks do not loosen mortgage lending standards; overall lending standards have not eased as yet, but still might not be conservative enough;
strong investor demand for commercial property driving up prices, but risks modest so far;
Australian bank profitability remains robust, capital ratios rising and bad debts falling;
shadow banking only small fraction of australian market, poses little systemic risk;
indicators point to low levels of financial stress in household sector;
business lending by foreign-owned banks in Australia expanding at a fast pace;
rising concerns about asset quality in china amid slower growth, softer house prices.’

[B]Wednesday [/B]will see the release of New Zealand’s exports, imports and trade balance, Japan’s Markit manufacturing PMI, Swiss UBS consumption indicator, German Ifo business climate, current conditions and expectations, U.S. new home sales.

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[B]Intra-Day Market Moving News and Views

18 Nov 2014[/B] [I]00:31GMT[/I]

[B]AUD/USD[/B] - ........ statement from RBA minutes, quote:
  • Australia C.bank minutes repeat outlook is for period of stability in rates
  • A$ above estimates of fundamental value, providing less help to economy
  • BoJ stimulus, Japanese pension fund flows could keep A$ above fundamental value
  • RBA board cited considerable uncertainty over China property market, impact on economy
  • domestic growth running at moderate pace, to remain below trend until late 2016
  • very low rates, growing population to support housing market, home building
  • higher home prices filtering through to household wealth and consumption
  • RBA board noted lending to home investors rising noticeably faster than to owner occupiers
  • mining investment still set to fall sharply, offset by rising resource exports
  • RBA board noted non-mining investment not being hampered by cost or availability of finance
  • labour market subdued, would be some time before unemployment fell consistently
  • sluggish wage growth to help keep inflation in line with target range

[B]Tuesday[/B] will see the release of Australia’s CB leading indicator, Westpac leading index and RBA meeting minutes, China house prices, U.K. CPI, PPI and RPI, Germany’s ZEW economic sentiment, U.S. PPI, Redbook, NAHB housing market index, net L-T flows, overall net capital flows and foreign treasury buys.

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11

[B]Intra-Day Market Moving News and Views

01 Dec 2014[/B] [I]01:46GMT[/I]

[B]AUD/USD[/B] - 0.8430 ... Australian dollar nose-dived against U.S. dollar due to the sharp sell off in crude oil prices. Stops below 0.8480 were triggered in New Zealand morning today and price fall to 0.8444 and then to a fresh 4-year low at 0.8417 in Asian morning.

Crude oil prices fell $1.41 to 64.74 following last Friday’s more than 8% sell off.
Offers are now tipped at 0.8450-60, 0.8480 and more at 0.8490/95.
On the downside, some bids are located at 0.8410-00 with stops seen below 0.8400.

[B]This week[/B] will see the release of the following economic data:

New Zealand’s Terms of Trade, Japan’s Business Capex, China’s NBS Manufacturing PMI, Japan’s Manufacturing PMI, China’s HSBC Mfg PMI Final, Swiss Manufacturing PMI, Germany’s Markit/BME Mfg PMI, eurozone Markit Mfg Final PMI, UK Markit/CIPS Mfg PMI, Mortgage Approvals, M4 Money Supply and Mortgage Lending, CAnada’s RBC Mfg PMI, US Markit Mfg PMI Final and ISM Manufacturing PMI [B]on Monday;[/B]

Australia’s Building Approvals and Current Account Deficit, RBA rate decision and statement, UK Markit/CIPS Cons PMI, eurosone Producer Prices, US Redbook, ISM-New York Index and Construction Spending [B]on Tuesday; [/B]

Australia’s GDP, China’s NBS Non-Mfg PMI and HSBC Services PMI, Swiss GDP, Germany’s Markit Services PMI, eurozone Markit Services Final PMI, UK Markit/CIPS Serv PMI, eurozone Retail Sales, US ADP National Employment, Productivity Revised, Markit Comp Final PMI, ISM N-Mfg PMI, Bank of Canada Rate Decision and Statement, US Fed’s Beige Book [B]on Wednesday; [/B]

Australia’s Retail Sales and Trade Balance, UK Halifax house prices, Swiss Industrial Orders, Bank of England rate decision, ECB rate decision, US Initial jobless claims, Canada’s Ivey PMI [B]on Thursday;[/B]

Japan’s Leading Indicator, Germany’s Industrial Orders, UK Consumer inflation expectations, eurozone revised GDP, US Non-Farm Payrolls, Unemployment Rate and Average Earnings, Canada’s Unemployment Rate, Employment Change and Trade Balance, US Factory Orders and Durable Goods [B]on Friday.[/B]

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12

[B]Intra-Day Market Moving News and Views
13 Feb 2015[/B] [I]01:06GMT[/I]

[B]AUD/USD[/B] - ..... Reuters news are quoting comments by RBA Governor Glenn Stevens & Assistant Governor Christopher Kent.

Kent says “there is some range of uncertainty around that forecast”.

Stevens says : “- enough spare capacity in economy that could grow above trend for couple of years;
-Australia business has significant lack of confidence, risks talking itself into gloom” and forecast is that unemployment will peak around 6.4%;
-is some range of uncertainty around that forecast and unemployment has been edging up, to keep happening for little while yet.
He continues his testimony before the parliament, quote:

  • economy growing at below trend pace
  • inflation is low and appears likely to remain so
  • further fall in a$ likely to occur
  • commodity prices have fallen quite sharply in some cases
  • monetary policy still has capacity to give additional support to economy
  • fall in key export commodities hurting Australia’s terms of trade
  • mining downswing will accelerate this year
  • bank’s forecasts assume lower path for interest rates, but is not a commitment to action
  • domestic demand outside mining mixed
  • public sector spending still fairly subdued
  • working with other regulators on managing potential risks from rise in housing investment
  • developments in Sydney housing market remain concerning; not alarming elsewhere
  • unwise to react too strongly to one unemployment number
  • unemployment has been edging up, to keep happening for little while yet
  • unemployment remains low by historical standards

[B]Friday[/B] will see the release of China CB Leading Economic Index, France’s GDP, Non-Farm Payrolls, Germany GDP, WPI, Switzerland’s Producer/Import Price, Italy’s GDP, euro zone’s Trade Balance, GDP, Canada’s Manufacturing Sales, U.S.'s Export Prices, Import Prices, and University of Michigan Sentiment.

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[B]Intra-day Market Moving News and Views
03 Nov 2015[/B] [I]07:00GMT[/I]

[B]AUS/US[/B]D - … Aussie trades near Asian high of 0.7213 after RBAQ stood pat in its rate decision. Reuters reported earlier Australia’s central bank kept its cash rate steady at a record low of 2.0 percent on Tuesday, but said subdued inflation meant there might be room for a further easing if needed to support the economy.

The Reserve Bank of Australia (RBA) disappointed some by not cutting straight away at its monthly policy meeting, though the shift to an explicit easing bias kept alive the prospect of a move at some stage.
In a brief statement, RBA Governor Glenn Stevens said the outlook for the economy had actually “firmed a little” in recent months with business conditions improving and employment stronger than expected.

“(Board) Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand,” he added.
Debt markets seemed to suggest investors were not counting on the RBA cutting by year end. Interbank futures for December slid to imply around a 36 percent chance of an easing, from above 70 percent earlier in the day. A drop to 1.75 percent is fully priced in by April.

Since last easing in May, RBA officials have sounded reluctant to cut even further in part for fear of inflating a debt-driven bubble in home prices.

There have also been hopeful signs of a pick up in non-mining investment with business conditions, confidence and borrowing all improving.

Yet, speculation about a cut had mounted after Australia’s major banks last month decided to lift mortgage rates in an effort to shield profits from rising regulatory costs.

A surprisingly low reading on price pressures out last week had added to the talk. Underlying inflation slowed to an annual 2.15 percent in the third quarter, near the floor of the RBA’s long-term target band of 2 to 3 percent.

With the broader economy still weighed by falling mining investment and weak commodity prices, some analysts had argued an easing would be warranted in the next few months.

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[B]Intra-Day Market Moving News and Views
05 Feb 2016[/B] [I]01:11GMT[/I]

[B]AUD/USD [/B]- ..... The RBA just released its Monetary Policy Statement, Reuters reported Australia's central bank sees sub-trend economic growth and tame inflation in the year ahead, but said any cut in interest rates will depend on whether the labour market deteriorated and if recent financial market turbulence pointed to a weaker global economy.

In its 66-page quarterly report on monetary policy released on Friday, the Reserve Bank of Australia (RBA) highlighted the surprising strength of the labour market which led it to cut forecasts for the jobless rate.

The past decline in the local dollar had also been a key support for the economy, particularly service exports ? a trend it expects will continue. It reiterated that continued low inflation would provide scope for further rate cuts, should that be needed to support demand.

At its first policy review for 2016 on Feb. 2, the RBA left the cash rate unchanged at a record low 2.0 percent, where it has been since May last year.

Data to be released on Friday:

Australia retail sales, Germany factory orders, France imports, exports, trade balance, U.S. unemployment rate, non-farm payroll, average earnings, private payrolls, manufacturing payrolls, participation rate, trade balance, Canada imports, exports, international balance, participation rate, net change in employment and Ivey PMI.

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[B] Intra-Day Market Moving News and Views
16 Feb 2016[/B] [I]01:16GMT[/I]

[B]AUD/USD [/B]- ...... Aud rose after release of RBA minutes. Reuters reported Australia's central bank said the pace of economic growth should pick up gradually in the next few years without inflation being a problem, a benign mix that might provide it with the scope to cut interest rates further if needed.

In minutes of its Feb. 2 meeting, where the Reserve Bank of Australia (RBA) kept the cash rate at a record low 2.0 percent, the central bank reiterated that very low rates and a weaker local dollar were already underpinning growth.

Based on the available data and the forecasts for economic activity and inflation, members judged that it was appropriate to leave the cash rate unchanged at an accommodative setting,the central bank said.
There continued to be evidence that very low interest rates were supporting growth in household consumption and dwelling investment and that the depreciation of the exchange rate was boosting demand for domestic production as it adjusted to the evolving economic outlook.

There was nothing in the minutes to suggest that the central bank has shifted its conditional easing bias. The Board noted that the outlook for continued low inflation may provide scope for easier monetary policy, should that be appropriate to lend further support to demand.

Highlighting the RBA’s level-headed approach to things, the Board began their discussion with developments in the domestic economy, while shrugging off the hysteria surrounding the recent turmoil in global financial markets.
The RBA said whether financial market turbulence presaged weaker global and domestic demand remained to be seen, their next meetsing due on March 1.

[B]Data to be released on Tuesday: [/B]

New Zealand retail sales, inflation expectation, Italy trade balance, U.K. CPI, core CPI, retail price index, producer price index, house price index, Germany ZEW current situation, economic sentiment, Eurozone economic sentiment, Canada manufacturing sales, U.S. housing market index, overall capital flows, foreign buying T-bond, NY Empire State manufacturing index and net long-term TIC flows.

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Intra-Day Market Moving News and Views (AUD/USD)
02 Mar 2016 02:38GMT

[B]AUD/USD [/B]- ...... Aud maintains a firm undertone after jumping from 0.7166 to 0.7236 after release of upbeat AU GDP data. Reuters later reported Australia's economy outpaced all forecasts to grow at the fastest pace in almost two years last quarter as strength in consumer and government spending offset the heavy drag from a global mining slump.

Gross domestic product (GDP) expanded by 0.6 percent in the fourth quarter, from the previous quarter when it rose an upwardly revised 1.1 per cent.
That propelled growth for the year to 3 percent, well above the 2.5 percent that had been expected by both analysts and the Reserve Bank of Australia (RBA).

The central bank has held rates steady since May last year and just this week skipped a chance to ease, saying it saw “reasonable prospects” for growth.
RBA Governor Glenn Stevens did say there would be scope for further easing given that inflation looked set to remain low, and investors are still wagering he will have to move eventually given headwinds facing the global economy.

However, the timing has been pushed out with interbank futures now implying a 45 percent chance of a cut by May, compared to 60 percent before the data.
The RBA has made it clear it would prefer any further stimulus to come through a lower Australian dollar, but is being thwarted by the drastic easing of central banks elsewhere.

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17

Intra-Day Market Moving News and Views (AUD/USD)
15 Mar 2016 01:30GMT

[B]AUD/USD[/B] - ...... The latest report from Australia's central bank RBA: The minutes suggested that there were "reasonable prospects" for continued economic growth and it was still too early to assess whether a bout of global market volatility early in the year foreshadowed something more sinister.

With low inflation, that would give it room to ease policy but only if it was “appropriate to lend support to demand”, the Reserve Bank of Australia said in minutes of its March 1 policy review, where it kept the cash rate steady at a record low 2.0 percent for a 10th month running.

It continued that there had been further indications of a rebalancing of activity towards the non-mining sectors of the economy, more recent data had suggested that the economy had continued to grow at a moderate pace in early 2016.
Their Members judged that there were reasonable prospects for continued growth in the economy and that it was appropriate to leave the cash rate unchanged at an accommodative setting.

The RBA cited low interest rates, above-average employment growth and a depreciation of the exchange rate over the past couple of years as factors underpinning the economy. It made no mention of a recent rebound in the local dollar.
Over the period ahead, new informational should allow the Board to assess whether the improvement in labour market conditions was continuing and whether the recent financial turbulence presaged weaker global and domestic demand."

Members spent part of the meeting discussing China, Australia’s single biggest export market.
They have observed that demographic changes and strong productivity growth had been key drivers of economic growth in China for some time, but these forces were now reversing and were likely to weigh on further growth as a result.
However, the process of urbanisation still had some way to run in China and that would tend to support growth in the working age population.
The RBA also noted that Chinese household incomes are likely to rise over time, creating long-run potential for Australia to increase exports of rural produce and services, including tourism, to China.

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18

Intra-Day Market Moving News and Views (AUD/USD)
17 Mar 2016 2:24GMT

AUD/USD - ..... Aud rose to a fresh 8-month high of 0.7620 after release of AU jobs data.  Australian employment barely rose in February but the jobless rate still fell back to 5.8 percent as fewer people went looking for work, a mixed report that did little to clarify the outlook for either the labour market or interest rates.

Thursday’s data from the Australian Bureau of Statistics showed just 300 net new jobs were created in February, though full-time employment did increase by 15,900, offsetting a fall of 15,600 in part-time jobs.
Median forecasts had been for a rise of 10,000 in jobs and a steady unemployment rate of 6.0 percent.

The monthly jobs numbers are notoriously volatile and the Reserve Bank of Australia (RBA) tends to focus on shifts in the unemployment rate to gauge the health of the labour market.

The drop to 5.8 percent would likely be welcomed then, especially as the central bank had recently highlighted unemployment as a key source of uncertainty going forward.
Interbank futures still imply around a 50-50 chance of a rate cut by August, in part because policy steps by other major central banks were pushing the local dollar higher in a way that could prove a brake on exports.

Just on Wednesday the U.S. Federal Reserve signaled a slowdown in the planned pace of its policy tightening, sending the U.S. dollar down across the board.
Asked about the Fed’s move on Thursday, RBA Assistant Governor Guy Debelle said practically every central bank in the world was keen to see a falling currency that would support domestic economies.
“We would like a lower Australian dollar. But we can’t all have depreciating currencies,” Debelle said, conceding it would be hard to engineer a decline in the Aussie.

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19

Intra-Day Market Moving News and Views
06 May 2016 02:40GMT

AUD/USD - .... Aussie tumbled after release of 'dovish' RBA's quaterly report. Reuters reported Australia's central bank slashed its inflation forecasts on Friday and warned that the outlook for wages and price pressures were a key uncertainty, suggesting the door was open to another cut in interest rates.

In its 66-page quarterly report, the Reserve Bank of Australia (RBA) gave no explicit guidance that it will ease again as it maintained its growth projections for a gradual strengthening through mid-2018.

On Tuesday, the RBA cut its cash rate by 25 basis points to an all time low of 1.75 percent, citing surprisingly low inflation readings for the first quarter.
RBA now sees underlying inflation at just 1 to 2 percent for 2016, down from a previous forecast of 2 to 3 percent. The central bank aims to keep inflation withing a 2 to 3 percent band over the medium term.
It expected only a modest pick up to 1.5 to 2.5 percent through to mid-2018. The downward revision reflected an expectation that domestic pressures, including labour costs, will pick up more gradually than previously anticipated, the central bank explained.

RBA cut forecasts for wage growth and warned it would remain around current low levels for longer than previously forecast and pick up only very gradually. This was consistent with the movement of workers from highly paid mining-related jobs to other employment.
RBA noted on the outlook for domestic cost pressures is a key source of uncertainty, and adding another big unknown is how the exchange rate will react to a myriad of overseas risks. It may respond to a number of influences, including any unanticipated changes to the outlook for growth in China, commodity prices or the monetary policy decisions of the major central banks. It therefore represents a significant source of uncertainty for the forecasts of inflation, as well as for the outlook for growth in activity.

For now, the central bank is maintaining its forecasts for gross domestic product growth. It sees the economy growing at a 2.5 to 3.5 percent pace for 2016, lifting slightly to 3 to 4 percent by mid-2018, thanks to low interest rates and a weaker local dollar.
The exchange rate fell sharply from 2013 to late 2015. It reacted negatively to Tuesday’s rate cut decision, but held above the troughs reached in September.

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20

Intra-Day Market Moving News and Views
14 Oct 2016 01:30GMT

AUD/USD - ...... Reuters just reported Australia's financial system is resilient to possible shocks though rising risks in the apartment and resource sectors bear close watching, the country's central bank said on Friday.

In a 52-page semi-annual report on the health of the banking sector, the Reserve Bank of Australia (RBA) highlighted pockets of domestic and foreign dangers.
Rising debt in China was a key concern, it said, since a rash of defaults could cause economic disruption in Australia’s single biggest export market.

Domestically, booming supply of new apartments in some inner-cities has raised the risk of a marked oversupply. If apartment market conditions were to deteriorate, banks could face material losses, the RBA warned.

Australia has successfully used historically low borrowing costs to spark a boom in home building that has helped shepherd the economy through the dog days of a global mining downturn.
But concerns about a borrowing-fuelled bubble in home prices was one of the reasons why the country’s central bank left interest rates at 1.5 percent this month.

It added that risks to financial stability from lending to households have lessened over the past six months as lending standards improved and the pace of credit growth slowed.

Banks have also taken steps to rein in risks including restrictions on lending to borrowers relying on foreign income and tightening lending conditions for new property developments.
The RBA pointed to risks in New Zealand given Australian banks have their largest international exposures there.

However, stronger capital and liquidity positions have bolstered the resilience of Australian banks, the RBA said, adding that a range of policies that are being finalised by regulators will further strengthen their position.
Australian banks have raised A$20 billion in capital since last year to boost their finances and have reduced focus on low-returning activities such as institutional lending.

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