Here are the figgures since RBAs meeting last Month on 2nd Oct 2007.
Case for a Rate Hike:
1) Market Expectations.
2) Core CPI, Expected 0.8, actuall 0.9, Last 0.9
3) Retail Sales: Expectations 0.5 actuals 0.8, Last : 0.7
Case For No Rate Hike:
1) HeadLince CPI:
Expected 0.9 Actuall 0.7 Diff -0.2 , Last Month: 1.2
2) Employment Change: Expectations 20, Actual 13, Last 31
3) Upcomming elections
4) Potential Round 2 of the credit crisis.
If It was my decision I would not hike the rates, I would wait another month and see the figgures. But thats me and I do not matter.
How to profit:
Most Likely there will be a spike either way , with a bigger spike if rate is not hiked.
If rate is Hiked I would expect a spike up of about 50 pips on the Aud/usd only to find price failing to sustain the new height and perhaps reversing to bellow prerelease and then if the tone is still hawkish continuing its climb upward.
If rate is not hiked I would see a considerable Sell off on Aud/USD for about 50-100 pips , only to attact buyers and continue its climb upwards.
I Feel the Australian Ecomomy is pretty strong and 25 basis points does not matter, and in the next 1 year we should get to parity.
Case for a Rate Hike:
1) Market Expectations.
2) Core CPI, Expected 0.8, actuall 0.9, Last 0.9
3) Retail Sales: Expectations 0.5 actuals 0.8, Last : 0.7
Case For No Rate Hike:
1) HeadLince CPI:
Expected 0.9 Actuall 0.7 Diff -0.2 , Last Month: 1.2
2) Employment Change: Expectations 20, Actual 13, Last 31
3) Upcomming elections
4) Potential Round 2 of the credit crisis.
If It was my decision I would not hike the rates, I would wait another month and see the figgures. But thats me and I do not matter.
How to profit:
Most Likely there will be a spike either way , with a bigger spike if rate is not hiked.
If rate is Hiked I would expect a spike up of about 50 pips on the Aud/usd only to find price failing to sustain the new height and perhaps reversing to bellow prerelease and then if the tone is still hawkish continuing its climb upward.
If rate is not hiked I would see a considerable Sell off on Aud/USD for about 50-100 pips , only to attact buyers and continue its climb upwards.
I Feel the Australian Ecomomy is pretty strong and 25 basis points does not matter, and in the next 1 year we should get to parity.