Archived IMT (2010.03.01)

RBA PREVIEW (we also got AUD Retail Sales at 00:30 GMT): Hardly anyone is speaking about tonights RBA interest decision (03:30 GMT) because most economists expect a 25-bp hike to 4.00%. Although we expect the RBA to make its 4th rate hike of the current tightening cycle, we deem this probability to be at 70%. More importantly, AUDNZD and AUDUSD could enter a lose-lose situation, whereby a decision to hold steady would be a punishing surprise for the Aussie, while rate hike may signal the end of the current tightening cycle. SEE AUDNZD HOT-CHART for more on RBA RATIONALE http://bit.ly/b9DCb9 We have seen in the past how strong Aussie jobs figures (November) and an RBA hike (December) occurred at the same week the Aussie ended lower. We could see AUDUSD retest 0.9030-40s61.8% retracement of the decline from the 0.9316 high to the 0.8580 low; but any subsequent break out has to face the 100-day MA at 0.9070. (100-day MA not broken since late January). An Aussie rate hike may be better capitalized upon vs. JPY than vs. USD, with 80.70 a possible target.