DXY is trying to rally.
AUD has flamed out despite RBA’s inept monetary policy.
Lead boots are going downhill again.
Gold is shaky, oil stupid.
The copper chaos intensifies.
Miners meh.
EM meh.
Junk up.
With yields down.
A stalled EUR is rescuing stocks.
UBS captures the moment.
British pop group Bucks Fizz gained international fame by winning the Eurovision Song Contest in 1981 with the song “Making Your Mind Up.
“The lyrics “You gotta speed it up, and then you gotta slow it down” and “Trust your inner vision, don’t let others change your mind” are reminiscent of RBA Governor Michele Bullock’s reasoning for leaving the cash rate unchanged. After all, it was a surprise to almost everyone—Bloomberg consensus expectations were for a 25bps cut, and money market pricing signaled a 24bps reduction.
Moreover, after the meeting, terminal rate pricing again moved above 3.0% after disappointing retail sales (2 July) pushed it down to 2.85%.
Bullock did sound more dovish in the press conference than what the statement suggested, in our view.
For example, she claimed, “The difference in opinion amongst the board members wasn’t so much directionally—it was about timing.”
The AUD did not rise much for a hawkish surprise. The RBA is losing credibility in FX markets. Not surprisingly, given that it has none.
I would not be surprised to see the AUD top out here as markets steer clear of Bullock’s mess.
