- AUD/NZD is trading on the front foot despite the prospects of an RBA rate cut.
- Markets are experiencing continued anxiety over the outcome of the US-China trade talks next week.
AUD/NZD is trading on the front foot despite the prospects of the Reserve Bank of Australia cutting interest rates at today's meeting. The NZD is under pressures considering the calls for the Reserve Bank of New Zealand to slash rates yet again before the year is out.
Analysts at Westpac noted that the market pricing for RBNZ is for 19bp of easing on 13 November, with a terminal rate of 0.59%. For now, there will be a focus on data in the lead up to November's meeting and indeed, the commodity sector will continue to be vulnerable with respect to trade talks and the global economic backdrop. – Indeed, markets are experiencing continued anxiety over the outcome of the US-China trade talks next week, as well as political uncertainty over the impeachment inquiry in the US.
A 25 basis point cut is likely
Meanwhile, the RBA is up next where a 25 basis point cut is likely. "With the RBA now playing catch-up to achieve its year-end ’19 and 2020 GDP forecasts that are premised on a cut by Nov, and signs that wages growth has stalled, the RBA need not wait to cut," analysts at Westpac explained.