5 Things Ahead of the RBA

Markets were choppy to start the week with the US dollar generally softer in New York trading after a soft ISM manufacturing report. The Canadian dollar was the top performer while sterling lagged. We take a closer look at a tough-to-handicap RBA statement due at 0330 GMT.

Central bank decisions don't get much closer than the RBA. Here are five things to keep in mind ahead of the decision.

1. The rate futures market slots the likelihood of a cut at 56%

2. Signals about the March meeting are almost equally as important with a 40% chance of a second cut priced in but a 12% chance of no cuts at all.

3. The remainder of the year is also critical with markets pricing in about 58 basis points of cuts. That would rise significantly in the event of a cut and a dovish RBA.

4. Only 7 of 29 economists surveyed by Bloomberg expect a rate cut.

5. AUD/USD fell to the lowest since 2009 on Thursday

Technically, AUD/USD is flirting with the 200-month moving average at 0.7788. There's also the July 2009 low of 0.7708; those are the key technical metrics to watch.

Another thing to keep in mind is the New Zealand dollar. It will track the AUD move following the RBA but the risks switch 18 hours later when the Q4 New Zealand employment report is due. That's followed a few hours later by a speech from Wheeler and he's sure to salt it with some anti-NZD jawboning.