Rate Cut Expectations Increase After Reserve Bank of Australia October Policy Decision

(This is an excerpt from an article I originally published on Seeking Alpha on October 2, 2013. Click here to read the entire piece.)

Financial markets expected no rate cut from the Reserve Bank of Australia (RBA), and they got no rate cut. However, for whatever reason, expectations for a rate cut for the November meeting represent an increase in odds. {snip}


Australian 30-Day Interbank Cash Rate Target Rate Tracker
Australian 30-Day Interbank Cash Rate Target Rate Tracker

Source: Australian Stock Exchange (ASX)

{snip}

In the immediate wake of the announcement, the Australian dollar (FXA) rallied a bit. As with many of these immediate, quick-trigger responses in the wake of minor news, the pop is in the process of reversing. Weaker than “expected” economic data in building approvals and the Australian trade balance seem to have encouraged the reversal at the time of writing.


The Australian dollar rallied in the wake of the decision leave rates alone
The Australian dollar rallied in the wake of the decision leave rates alone

A W-bottom remains well-intact, supported by an up-trending 50-day moving average
A W-bottom remains well-intact, supported by an up-trending 50-day moving average

Source: FreeStockCharts.com

{snip}

Be careful out there!

(This is an excerpt from an article I originally published on Seeking Alpha on October 2, 2013. Click here to read the entire piece.)

Full disclosure: no positions

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