RBA will likely hew a neutral line - BBH

According to the analysts at BBH, the Reserve Bank of Australia will likely hew a neutral line and after it recently updated its macroeconomic forecasts, there is little new that may be added.  

Key Quotes

“The stabilization of the Chinese economy and the stable to stronger US and European economies have lifted the global outlook.  With a surge in iron ore, coal and copper prices, Australia enjoyed a sharp improvement in its terms of trade.  This is unlikely to be repeated, and instead, some deterioration is now likely.”

“The Australian dollar has repeatedly tried to break above $0.7700, but ultimately failed and was sold through $0.7600.  It recovered in late Friday turnover, but speculators who have built their largest net long position in the futures market may be looking for an opportunity to cut back on exposure.  Rate differentials are also moving against Australia (smaller carry).”