We revise our short-term AUD-USD forecasts higher on better data, a change in RBA stance, positioning
• We expect AUD-USD to remain range-bound in H2 with offsetting factors in play
• Leveraged funds: We recommend buying 1M AUD-USD call versus se...
We expect no further rate cuts by the RBA, but expect it to retain its easing bias
• The improving US economy and monetary policy divergence will likely push the AUD lower
• We maintain our bearish view on the AUD against a stronger USD and a dovi...
The RBA is likely to ease further; we expect a 25bps cut in August and another 25bps cut in December
• Domestic data remains mixed; China’s slowdown will weigh on growth
• Inflation is benign despite a mild uptick in Q2 and recent AUD depreciation...
The RBA is likely to ease monetary policy further; we expect a 25bps cut as early as June
• Domestic data has been mixed; further monetary impetus is essential to boost the economy
• Inflation is benign and recent AUD-USD move lower is not an impe...
We now expect the RBA to stay put in August due to improved data and upbeat RBA comments
• But benign inflation should provide the RBA the room to ease if needed, possibly by 25bps in Q4
• Beyond that, a rebound in China’s growth and Australia’s ...
Top 3 data/events
• Thailand – BoT to keep interest rates on hold
• Ghana – BoG expected to hike another 100bps
• United States – Small business to be range-bound in 2012
• Market focus
• The Greek elections on 17 June continue to pose a threa...
Despite strong Q1 GDP and May labour-market reports, we still see the RBA staying dovish in Q3-2012
• We revise our RBA rate call, now calling for a total of 50bps more cuts in the coming months
• Risk of AUD collapse mitigated by FX rebalancing o...
• The trend in the participation rate is critical for the unemployment rate
• We now expect less downward pressure on the unemployment rate from participation-rate declines
• Payroll growth of 150,000 monthly, as we expect, will allow unemploymen...
Top 3 data/events
• Australia – Terms of trade expected to have fallen
• Taiwan – Export orders are likely to increase in absolute terms
• Germany – IFO indices may lose momentum
• WGBI inclusion is important, but overestimated;...
We expect contained Q1 CPI inflation, but inflation expectations have risen and wage growth is firm
• Dovish RBA stance convinces us that cash rate will be cut by 25bps to 4.00% on 1 May
• Rate cut will not solve fundamental structural issues, an...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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