AU RBA Interest Trigger:
Previous release: 4.50%
Forecast: 4.75%
Our trigger:
BUY AUD/USD OR AUD/JPY if the release prints as forecast 4.75%
SELL AUD/USD OR AUD/JPY if the release is 4.50%
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Monday, 4 October 2010
PRE-RELEASE - AUD-RBA-Interest Rate Report
When the outcome of the Reserve Bank board meeting tomorrow is announced, among the most keenly interested will be the treasurers and chief financial officers of the major banks. It has become very obvious in the past month that they are becoming anxious about their net interest margins and hanging out for cover for an increase in their home loan rates.
A 25 basis point rise in official rates would bring some relief but there is also a very real prospect that the banks will defy Wayne Swan’s warnings and, if the RBA moves, add 15 or 20 basis points of their own.
While Swan has said there is no justification for a rate rise outside or beyond the RBA’s cycle, and the RBA itself has said the rise in the banks’ interest income over the past two years has been sufficient to fully recoup...