Archived IMT (2009.03.24)

Watch out for tomorrow's speech by RBA governor Glenn Stevens (7.30am GMT) for any clues on monetary policy and the latest gauge on interest rate expectations. Currently, markets price above a 50% chance of a 25-bp rate cut to 3.00% next month after rates were held unchanged this month. Although RBA kept door open for further easing, the fact that market conditions are now superior than those prevailing during the decision to hold could suggest the RBA may stand pat again if current stabilization persist into April 7. While tomorrows speech will likely reiterate the RBAs forecasts for more slowdown, FX traders may keep Aussie supported based on near-term bottoming in rates.