Our currency strategist Patrick Bennett didn’t see anything in particular different in the RBA March monetary policy minutes – members have not decided what they will do at this point but all else equal it read that they will cut again but if data improves, then decision will be different. The only reason for move in Aud from 0.7635 to 0.7611 was that RBA members viewed the case to ease policy further.
Patrick summed up on RBA that they continued to talk about easing further based on current outlook. I is important that RBA does not need a worsening in conditions or data for that to be actioned. On currency, RBA continued that they would like to see it do more work to re-balance the economy of course lower. RBA does not express the concern that the housing market has. Our view remains – house prices will not stop them easing further.
Our trader Sam likes short AudNzd – as supposed to short AudUsd, targeting 1.01 to parity.
Positive Nikkei kept UsdJpy firm into Tokyo open and then spiked to 121.53 over the RBA minutes. Again, Japanese guys are fearful of “words” about this excessive Jpy depreciation. BOJ in line with expectations – don’t know why there was this kneejerk reaction from 121.47 to 121.295. Offers mount from 121.70 and thickens towards 122.00. Japanese importers are rumoured to be bidding UsdJpy at 121.00. Light in the expiries, only interesting is Fri’s 121 strike worth $3.3 yards NY cut.
Think market is getting tired on the Greek stories. Euro slipped from NY’s close of 1.0570 and reached 1.0557 on back of Tokyo fixing supply. Euro extended to 1.0551 where we found bids and reversed back to 1.0572. I heard better bids into the 1.05-twenties and stop buy orders thereafter 1.0620.