Via eFX a quickie on the AUD and RBA:
We think the AUD is likely to come under renewed pressure in the coming week. Tuesday (17 May) features the release of the Reserve Bank of Australia (RBA) May meeting minutes, which could shed more light on the central bank's unexpected policy rate cut on 3 May.
Furthermore, the Australia April employment report is out on Thursday (19 May).
Our economists expect the RBA to cut rates at its next meeting in June, with the risk that it could cut further in August if Q2 CPI surprises to the downside.
Meanwhile, the rate markets are only pricing in a full RBA cut by November 2016, implying there is significant room for market pricing to turn more dovish on the RBA. BNP Paribas FX Positioning Analysis signals that AUD positioning is now neutral, reaching a score of +1 from +6, on our scale of +/- 50.
We remain long EURAUD via options.
