That is according to the well know RBA-watcher Terry McCrann who has been very accurate in his predictions over the last few months.

Thoughts of well-respected RBA watcher.

I’m not sure whether this is a bullish or bearish sign. On the one hand, the market has again shown a strong propensity to bounce straight back after a sell-off but on the other hand the fact that one set of stops was done might suggest that the next set undet .9050 will also get done. Either way, I’m still in the buy-big-dip camp. RBA minutes from the last meeting will be released at 11:30 Sydney time.

A Reuters poll of professional analysts suggests that the RBA will pause in April before hiking by 25 bps in May. The futures market would seem to agree with this assessment.

Owner-occupied housing finance fell by almost 8% in Australia in January, against expectations. The AUD/USD has now fallen back to it’s opening level at .9135. Support is firm at yesterday’s low and the 100-day MA at .9060. Not much in the way of resistance levels until .9320. I do not expect either of these levels to be remotely challenged today and the market will await tomorrow’s employment data before deciding on it’s next big move.

Assistant Governor Lowe is on the news wires stating that the RBA sees economic growth at or above average for the next few years. Global risks need watching but the central scenario remains positive for Australia. Main challenge is to expand the supply side to satisfy demand without causing inflation.

Looks like the interest rate tightening cycle might be with us for a while yet. The AUD/USD has popped from .9135 to .9155 on these comments.

The latest ANZ data on job advertisments have improved again after a slight blip last month.

That is better than the expected 0.5%. Building approvals fell sharply by 7%. The AUD/USD is pretty unchanged at .8995 after this mixed data.

The liklihood is that the RBA will hike rates by 25 bps at 2:30 this afternoon Sydney time. If they do, then the market will target stops above .9070. If they don’t, then we might see a bigger move down as longs bail out. Nevertheless, as Jamie wrote earlier, the commodity currencies are looking particularly attractive in the current environment and any major dips will be very well supported.

Good luck today.

The actual number was AUD$17.46 billion. Business inventories were +0.2%, less than the 0.7% expected, and company gross operating profits were +2.2%, also slightly less than expected.

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