The Reserve Bank of Australia minutes ar due today, preview here:
Mizuho with a very pertinent summary of the AUD and the RBA:
- A re-assessment of RBA risks are ripe with a new governor ... and in the context of Fed expectations shift. And to be sure, markets may still be anticipating greater patience, but not an imminent pivot. In other words, a tightening bias being retained.
- Nonetheless, this is not likely to be associated with unbridled AUD bullishness.
- For one, a more unfiltered pass-through of China's industrial/invetment shortfall alongside stimulus disappointments through the commodities amplification channel will likely subdue AUD upside. This seen dampening fresh 0.69-0.70 forays.
- What's more, the RBA's more apparent restraint could also factor in.
- All said, we expect AUD to consolidate (mostly) above 0.68 with shallow 0.69+ bounces.
- But breaching 0.70 towards 0.71 with confidence may require another bearish USD wave and/or China optimism.
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Bolding is mine, keep an eye on these.
