First, the RBA finally cut the lending rate by 25 basis points to 2.75%. By the close of the market, the Aussie dollar remained weak as some were surprised by the move. As I promised my readers of NOTES it is the 2/10 yield curve where the indicator of further currency and bank action will be found. The 2/10 steepened a slight three points, but the action ahead will be the key. Failure to take out recent steepener highs will be an indicator that the RBA has more work to do if it wishes to give a boost to the Australian economy.
Posts Tagged ‘Kenneth Rogoff’
Notes From Underground: Better Data Leads to More of the Same
October 3, 2011Global equity markets were battered for another day as investor fears continued to outweigh any desire to add risk to portfolios. All U.S. data releases were better than expected and even auto sales proved to be a million more units above consensus on an annualized basis. The equity markets did try to rally but the attempt was short-lived and by market’s end the selloff was greater than 2.5%. Commodities were soft and the DOLLAR continued to rally on its haven status. The BOND market saw the impact of the “TWIST” as it is now October and the SOMA (SYSTEM OPEN MARKET ACCOUNT) began its work on affecting TREASURY DURATION.