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RBA day today

Published June 4, 2019

Author: Rhys Miles

As per yesterday’s commentary, an RBA cut appears almost a formality. A no move would be the real shock. Overnight markets continue to react to any further suggestions on tariff impositions or indeed anything to maintain the global growth slowdown story.

There wasn’t much to report however with the Dow finishing flat and the AUD continuing its ever so gradual appreciation or at least maintaining its footing against the USD. The markets are now pricing in an 80% chance of a rate cut from the US Fed in July bringing forward their expectations which as recently as 1 month ago had the earliest cut forecast to be in the last quarter.

Chinese manufacturing data yesterday was slightly better than expected offset overnight though by poor US manufacturing data.

At 2.30pm today the RBA language accompanying the cut (if they do) is paramount. It will be in the short term, the driver of local equities and the AUD.