The Australian dollar’s overnight bounce has eroded through the day as Trump impeachment fears fade:
XJO is down modestly:
Bonds are bid again: 
Dalian has flatlined:
Big iron is weak:
Big oil too:
Big gold strong:
Big banks are soft as rate cuts present mortgage book growth but falling margins:
Big realty always likes the RBA chainsaw:
A snippet from UBS tells the tale:
On housing, Lowe noted a “stabilisation of the housing markets in some cities”. In Q&A, when asked about rising housing prices, he responded that “I’m not particularly concerned about that” and “we could have a period of rising housing prices, because construction activity is slowing while the population is still rising quite quickly … from a monetary policy perspective, it’s not an issue at the moment, it would become an issue if credit growth accelerated rapidly, but I see no signs of that at the moment”. This is consistent with our view that the RBA could cut the cash rate, but then implement macroprudential after, if home loans & price growth are stronger than desired.
Hence, we still expect the RBA to cut 25bps in October, & again in Feb-20 & May-20 to 0.25% amid rising unemployment & further global central bank easing. In our view, Lowe’s speech reduced the risk of an ‘on-hold’ in October, but if the RBA does hold, a cut in November is clearly still very likely.
The only question now it where is the terminal rate. I will say 50bps because the banks will force their margins concerns onto it. Therefore, Aussie QE looms looms by mid-2020 as the developing terms of trade income shock drops the next anvil upon Australia.
UBS has a price target of 50bps on the ten year!
