Commentary:
The RBA meeting tonight should be interesting. The Bloomberg consensus is for no cut, but most banks expect a cut within the next couple months. Australian data has surprised to the upside recently, against a backdrop of weak data in Europe and China. Commodity prices have also fallen, as has the currency. Both the commodities related as well as trade related sectors have suffered, but arguably neither sectors’ problems can the resolved by the RBA alone, at least not without substantial side effects. (The RBA can certainly ease further to weaken the AUD, but to get a substantial weakening, they may need to cut to zero to compete with the Fed. Certainly the last 100bps of cuts hasn’t had much of an effect. )
It is very likely that the next RBA action is a cut – and quite possibly a series of cuts. What is somewhat uncertain is the timing.
Notable:
- Italy Service PMI improved to 47 vs 45.9 exp and 45.5 prev. French and German figures were both revised higher.
- EU Retail Sales declined -2.4% YoY in March vs -2.2% exp and -1.4%
- China HSBC Service PMI declined to 51.1 vs 54.3 prev
- Australia Retail Sales declined -0.4% MoM in March vs +0.1% exp and 1.3% prev
- NYT: the study ranked the 36 justices who served on the [supreme] court over those 65 years by the proportion of their pro-business votes; all five of the current court’s more conservative members were in the top 10. But the study’s most striking finding was that the two justices most likely to vote in favor of business interests since 1946 are the most recent conservative additions to the court, Chief Justice Roberts and Justice Samuel A. Alito Jr.,
- WSJ: More than 100 studies of twins and adopted children have confirmed that about half of the variance in aggressive and antisocial behavior can be attributed to genetics… In one recent study, brain scans correctly predicted which inmates in a New Mexico prison were most likely to commit another crime after release.
- US Phone Install Base via Asymco:
Upcoming Data:
- Tues: RBA
- Wed: Canadian Housing Starts, China CPI, Australia Employment
- Thu: UK IP, BoE, Canada New House Price Index, US Jobless Claims
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