{"id":148363,"date":"2019-05-24T14:42:01","date_gmt":"2019-05-24T18:42:01","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=148363"},"modified":"2019-05-24T14:42:01","modified_gmt":"2019-05-24T18:42:01","slug":"the-week-ahead-friday-24th-may-2019-currency-point-just-do-it-already-aud","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/05\/the-week-ahead-friday-24th-may-2019-currency-point-just-do-it-already-aud\/","title":{"rendered":"The Week Ahead: Friday 24th May 2019 \u2013 Currency Point \u2013 Just do it already, AUD"},"content":{"rendered":"<div id=\"inves-4203388746\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">May 24, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Evan Lucas, <a href=\"https:\/\/www.fpmarkets.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">FPMarkets.com<\/a><\/strong><\/p>\n<div class=\"section-header\">\n<h3>Currency Point \u2013 Just do it already, AUD<\/h3>\n<\/div>\n<p><iframe loading=\"lazy\" id=\"_dytid_8078\" src=\"https:\/\/www.youtube.com\/embed\/yl8NciB2F6s\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p><b>Currency Point \u2013 Just do it already, AUD<\/b><\/p>\n<p>The RBA is killing me, I have long believed that it would eventually be forced to cut rates in 2019. However, the consistent message had been \u2018wait and see\u2019 and \u2018employment will save the day\u2019. Thus, I saw the first move in August as it would give the RBA a chance to \u2018evaluate\u2019 Q2 CPI and 2 months of employment data post the Federal election and realise it need to finally cut rates.<\/p>\n<p>However, in his speech to the Economic Society of Australia titled: \u201cThe Economic Outlook and Monetary Policy\u201d, his final paragraph blew that all up.<\/p>\n<p><i>\u201c[in] a scenario in which there was no further improvement in the labour market and the unemployment rate remained around the 5 per cent mark\u2026 we judged that inflation was likely to remain low relative to the target and that a decrease in the cash rate would likely be appropriate. A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target. Given this assessment, at our meeting in two weeks\u2019 time, we will consider the case for lower interest rates.\u201d<\/i><\/p>\n<p>This begs the question: Why wait? Do it now not in 2 weeks as the RBA governor has just told the market he and Co. will cut rates on June 4 and the market has now priced in a second 25 basis point (bps) rate cut in August too. (So, I might still be right, just that is will be the second round not the first.) It\u2019s a forgone conclusion and the AUD has priced this scenario as fact.<\/p><div id=\"inves-3872623895\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>What\u2019s interesting now from a currency point of view is the AUD could be on track to become a carry trade FUNDING source rather than carry trade destination. The Aussie 10year US 10-year differential could be -125bps as early as August 7 that is attractive and a further AUD negative.<\/p>\n<p>AUD\/USD has already bolted in my opinion. The initial bounce back above 69c last week on the surprise re-election of the Morrison centre-right government gave the AUD a sugar hit nut was short lived, and the pair is now not at an entry point of interest.<\/p>\n<p>What are looking like interesting trades is AUD crosses of CAD and JPY. Like AUD\/CAD better<\/p>\n<p><a href=\"http:\/\/go.fpmarkets.com\/visit\/?bta=35137&amp;nci=5462\" target=\"_Top\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/fpmarkets.ck-cdn.com\/tn\/serve\/?cid=361646\" width=\"728\" height=\"90\" border=\"0\" \/><\/a><\/p>\n<p><b>Idea: Short AUD\/CAD<\/b><\/p>\n<p>Looking for 0.90c, entry 0.935c or better, stop loss, 0.95c<\/p>\n<p>Reasoning:<\/p>\n<p>\u2013 Dovish RBA with expected 50bps of cuts coming in the next 3 months.<br \/>\n\u2013 Australian employment and construction markets to remain subdued<br \/>\n\u2013\u00a0Canadian Employment and Wage growth have been ahead of expectations<br \/>\n\u2013 BoC has moved back to a Hawkish stand point despite some weakness in oil<\/p>\n<p><strong>By <a href=\"https:\/\/www.fpmarkets.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">FPMarkets.com<\/a><\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Evan Lucas, FPMarkets.com Currency Point \u2013 Just do it already, AUD Currency Point \u2013 Just do it already, AUD The RBA is killing me, I have long believed that it would eventually be forced to cut rates in 2019. However, the consistent message had been \u2018wait and see\u2019 and \u2018employment will save the day\u2019. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-148363","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/148363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=148363"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/148363\/revisions"}],"predecessor-version":[{"id":148364,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/148363\/revisions\/148364"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=148363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=148363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=148363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}