AUD/USD was taken lower immediately, data is here:
Every one of the three measures produced by the abss Australian Bureau of Statistics came in below median estimates.
Expectations of an Reserve Bank of Australia rate cut as soon as May 7 (the next meeting) have jumped, currently sitting just under a coin-toss at around 40%. Complicating the outlook for May is the Australian election due May 18.
Further out, July is tracking around 80% probability (based on market pricing). Further out than that and a cut is 100% according to market pricing.
For May the RBA Board will be looking at:
- inflation missing target for more than 3 years
- jobs growth sill solid
- wage growth barely existent (better wage growth would give the RBA a glimmer of hope that inflation will rise towards their target band)
- China recovering and showing better data
Something else the RBA will have to consider, and that's their own Statement on Monetary Policy due on May 10. They will be needing to lower their CPI forecasts in that. To do so (again) and not have cut rates on May 7 would make them look foolish indeed.
AUD is not showing much of a bounce. Maybe we wait for Londong traders to trash it further from her, can't see why not.
AUD selling has seen some overlap into the NZD, its down 30 or so points since the Australian data.
