RBS: 100% chance of April rate cut

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From Forexlive, OIS is pricing 74% chance of cut in April but RBS says 100%:

“We agree that there is little reason for the RBA to wait…However, we doubt the RBA will rush to cut rates after April and it may not need to if the AUD falls as we expect it to against a stronger USD. We are at least watchful of divergence with Chinese capital markets, but perhaps the AUD is a better guide to conditions in China,” RBS argues.

“We continue to see the AUD falling towards 0.65 this year in the context of weaker commodity prices and a stronger USD,” RBS projects.

With the iron ore crash now entering capitulation I agree.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.