4 Jul 2013
Flash: Despite Stevens, don't rush to price RBA Aug cut - NAB
FXstreet.com (Barcelona) - RBA Governor Stevens triggered a sell-off in the AUD/USD on Wednesday, after saying - in what many believe as part of a 'joke' - "the RBA deliberated for a very long time" before deciding to keep its interest rate unchanged.
As NAB Strategists note, the above plus his prepared comments that “we will continue to do our part...to assist the transition in sources of demand that is needed” and that, “we will do what reasonably can be done”, certainly justified the suggestion that the board was closer to further policy easing than many thought was the case ahead of yesterday’s meeting.
Despite the comments from Stevens, which many commentators believe were 'misinterpreted' - NAB is not rushing to revise its RBA forecast on the back of Stevens’ remarks: "After all, if the RBA deliberated and decided against a rate cut yesterday, presumably something will need to chance between now and August for them to act next month."
NAB adds that the NAB business survey, June job figures and the Q2 CPI report will all be relevant. "Either evidence of deteriorating economic conditions, or further softening in underlying inflation pressures, should be needed for a cut" NAB said.
As NAB Strategists note, the above plus his prepared comments that “we will continue to do our part...to assist the transition in sources of demand that is needed” and that, “we will do what reasonably can be done”, certainly justified the suggestion that the board was closer to further policy easing than many thought was the case ahead of yesterday’s meeting.
Despite the comments from Stevens, which many commentators believe were 'misinterpreted' - NAB is not rushing to revise its RBA forecast on the back of Stevens’ remarks: "After all, if the RBA deliberated and decided against a rate cut yesterday, presumably something will need to chance between now and August for them to act next month."
NAB adds that the NAB business survey, June job figures and the Q2 CPI report will all be relevant. "Either evidence of deteriorating economic conditions, or further softening in underlying inflation pressures, should be needed for a cut" NAB said.