Halister News

(Bloomberg) -- RBA could be sidelined, awaiting the outcome of the May 3 budget to see how much heavy lifting is required of monetary policy, writes Bloomberg strategist Michael G Wilson.

• RBA will leave its benchmark rate unchanged tomorrow, according to all 26 economists surveyed by Bloomberg; announcement due at 2:30pm Sydney time
• RBA governor Stevens has signaled that Aussie strength may be getting ahead of itself
  • Leveraged funds’ net AUD longs rose to 22,933 contracts in the week ended March 29, highest since Sept. 2014, from 18,377: CFTC data
• At an ASIC forum on March 22 Stevens said: “Even with interest rates at already low levels, and public debt higher than it was, there would, in the event of a serious economic downturn, be more room to ease both monetary and fiscal policy than in many, indeed most, other countries.”
• Stevens may also take into account the performance of kiwi, which is stronger since RBNZ lowered rates on March 10
• AUD/USD down 0.5% to 0.7640; rising 6% since RBA meeting on March 1
• NOTE: Michael G. Wilson is an FX strategist who writes for First Word. The observations he makes are his own.