Article in today’s local SMH paper saying that the market may have reacted too hawkishly to the recent speech by RBA governor, Glenn Stevens. Traders are in two minds whether the next rate rise in Novemeber, scheduled on Melbourne Cup day, will be 25bps or 50 bps. The author of the article, Ross Gittins, is adimate that the RBA willstick to gradual increases of 25bps and if the CPI data out this Wednesday, comesin on the softer side then the RBA may even leave rates on hold for November.
There has been some selling of AUDJPY earlier this morning, down towards 84.65, but some traders say that the article may have also prompted some profit taking. Having said that, sovereign names have been persistent buyers on dips this morning, as Sean has mentioned. Look for initial support around 9180, resistance 9250. Personally, I will be playing the range, with a downside bias today.
