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According to Sean Callow, analyst at Westpac, market pricing for an RBA rate cut crested after Friday’s SoMP, which forecast Australian GDP growth between just 2.4% and 3.0% until 2021.

Key Quotes

“Yields have risen this week though, even brushing off yet more evidence of housing market weakness.”

“Importantly, Feb consumer sentiment and Jan business conditions surveys both showed sharp rebounds that left both indexes above long term averages. The coast is not clear of course, with next week’s WCI and unemployment data to be closely watched. RBA cash rate pricing should remain skittish but we suspect it won’t be a fresh negative for AUD near term.”

“AUD/USD should keep finding buyers around 0.7060, with risks higher on the week, back towards 0.7200. 200dma at 0.7274 to cap.”