Market Movers: RBA cuts rates to 2%, AUD climbs higher – TDS

FXStreet (Barcelona) - Prashant Newnaha, Strategist at TD Securities, summarizes the market performance during the Asian trade, noting that the removal of forward guidance by the RBA led AUD/USD to be the clear outperformer in G10 space.

Key Quotes

“All eyes were on the RBA ahead of today’s rate decision. While TD and consensus favoured the RBA to cut, as it did by 25bps to 2%, it was the removal of forward guidance that came out of left field that had markets predicting the RBA was pretty much done on cutting rates any further.”

“Bond yields rose sharply, 3yrs +11.5bps and the 10s +13bps and the AUD rallied from a spike low of US$0.7788 on news of the cut to touch a high of US$0.7917."

“As a result of the +0.9% AUD move today, it is the clear G10 outperformer with most crosses unchanged vs the USD, but it was the Euro currencies that were marginally weaker, down between 0.1-0.15%."

“Equity markets are in profit taking zone, led by Chinese stocks, down 2.3%, Hang Seng –1.3% while the ASX is off smalls.”

“Gold, copper and brent are down -0.3-0.4% but iron ore futures for Sep delivery are up +2%.”