The highlight of Asia-Pacific trading will be the RBA decision at 0430 GMT.
All 24 economists surveyed by Bloomberg expect no change from the 3.50% cash target. Economists expect the RBA to hold rates again in October and then cut at the November meeting.
The OIS market is showing a 20% chance of a cut today and is fully priced for two cuts before the end of the year.
If the RBA takes a strongly dovish stance, we could see AUD/USD back to parity in short order.
Comments about China will be interesting, The most-recent statement said “China’s growth has moderated to a more sustainable pace, but does not appear to be slowing further.”
Herald Sun RBA watcher McCrann believes the RBA will decide what to do next once the direction of the economies in Europe, the US and China are more clear.
