Author: Rhys Miles
A positive rebound on equities overnight will no doubt be reflected in Asian equities markets today. US Fed chair Powell’s overnight comments that the Fed is willing to slice interest rates in the event a trade war causes a material impact on US economic growth saw a 2% rally in the Dow. Locally, the eagerly anticipated rate cut from the RBA materialised yesterday with their accompanying statement in part reading
Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.
The AUD had an immediate rally, albeit short lived but still maintaining the mid 0.6900 level at COB yesterday and last night briefly flirting with 0.7000 after a sell- off in the USD. It will now be a wait and see approach from the RBA for improving data and possibly how accompanying tax cuts filter through to key economic indicators.
We do have GDP locally today at 11.30am but this will be as anti- climactic as it gets given it is released post RBA. Tomorrow night we have the ECB rate decision and European GDP released.
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