The 10 critical things to consider ahead of today’s RBA decision

  1. The Bloomberg survey says 20 of 27 economists expect the RBA cut today
  2. Just 9 of 26 economists correctly called the rate cut last month
  3. Of the 9 who were correct last month, 7 expect the RBA to cut today
  4. Westpac was correct last month and is ranked as the top RBA forecaster. Westpac economists and the bank’s CEO are calling for a cut today.
  5. The OIS market is 51% priced for a cut after hitting as high as 80% before the CPI numbers
  6. Interbank futures price a 60% chance of a hold
  7. All market-based metrics, show that a cut is virtually certain by year-end
  8. Herald Sun columnist McCrann says the RBA will hold but he has a nearly unblemished record of being wrong this year
  9. David Uren at The Australian (who is much better than McCrann) says there is a less than 50% chance of a cut
  10. The RBA has adjusted interest rates in Nov in every year since Stevens took over in 2006

This is one of the toughest calls in a long time — even tougher than the US election. My best guess is that they hold and AUD/USD rallies above 1.04.

Author: Adam Button

Adam Button is the editor of ForexLive™. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes deeply in the value of knowing every tidbit of news. He has a background in journalism and was formerly the head of the markets team at the Canadian Economic Press. He is a graduate of Ryerson University and completed Level 1 of the CFA program. Adam lives in Montreal, follow him on Twitter: @FX_Button.

3 Comments

  1. won’t cut; and I’ll have to work some more in savin’ my aud/usd short… the annoyance…

  2. if it rallies above 1.04 – it’s going to be a short lived rally^^

  3. Interbank futures now into 50%
    Betfair even lower , trading at 45% ; – http://sports.betfair.com/?mi=100544713&ex=2&origin=MRL

Top

© Copyright 2014 ForexLive™  |  Advertise With Us  |  Login To Comment  |  Sitemap

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.