During the Asian session, traders will focus more on the RBA interest rate decision on the base interest rate and the bank's report on monetary policy in the country. As far as stock markets are concerned, we will probably see a slight decrease for Asian indices, especially those in China.
The fall in Chinese indices will also be the basis for concerns among RBA members. Weighing the fact that Australia is an export-oriented country to China, a slowdown in the Chinese economy may prove to be disastrous for the country. Expectations to raise interest rates today are nil, and given the outlook against the backdrop of deepening trade war, central bankers remain extremely conservative.
In the bank's report, I expect bankers to confirm their support for a weaker monetary policy to mitigate the consequences of the war. This will lead to additional AUD auctions, but I do not expect big movements, as the position of the bank is largely accrued in the price. Greater influence for the Australian may change the tone of the central bankers, the desire to tighten monetary policy. This will be an event that is not accumulated by markets and will lead to strong AUD growth.
Charts: Used with permission of Bloomberg Finance L.P.
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