The highlight on the calendar next week is the RBA decision, which comes late Monday night for US traders, early in the morning for those in Europe, at 0430 GMT.
A rate cut is not the slam dunk that it seems and there is a risk of a massive short squeeze if it doesn’t. The market is heavily invested in lower rates with 26 of 27 economists forecasting a quarter-point cut to 2.50% and the OIS market implied at 91%. That leaves some chance for a surprise and with the market betting big against the Aussie, I suspect we’ll see a minor bounce before the decision on jitters about a disappointment.
