RBA sounding quietly optimistic – ING

Analysts at ING explain that in its latest monetary policy decision, RBA like many central bankers sounded a little more optimistic.

Key Quotes

“Typically upward revisions to global growth prospects are good for commodity prices and Australia’s Terms of Trade – although we see that Iron Ore, one of Australia’s key exports, has fallen sharply over the last 8 weeks on supply, not demand concerns.”

“Given the RBA’s expectation of growth slowly rising to 3% and underlying inflation edging higher, we are a little surprised to see the market pricing flat RBA rates out to 12 months. With the Fed sounding neutral this week and the market welcoming the compromise that avoided a US government shut-down, the AUD should find some support into dips. Initial support seen at the 0.7470/90 area.”