RBA HOLDS RATES

As widely expected, RBA held the cash rate at 2.00% but the market was more interested in reflecting on the statement by the Governor, Glenn Stevens. The statement reflected on the upward trend of the Dollar and how that might "complicate the adjustment under way" in the domestic economy post mining boom. Whilst the statement outlined weaker growth in China, it did reflect on the improvement in other global economies and increase in commodity prices. The CPI data for quarter ended March 2016 now becomes quite important as continuation of low inflation in the economy along may still allow the RBA to hold rates inspite of the encouraging labour market data that came out earlier during the month. Our call is for rates to hold ground at least until the end of this year.  

GLOBAL ECONOMIC CONCERNS PUTS OFF US RATE RISE

Despite improving economic data out of US, the weakness in the global economy continues to worry the Fed and the Central Bank put off rate rises at least for now. The Fed is concerned about the slowdown of growth in China and in Europe where the ECB is still trying to kick start the economy with more easing announced earlier in the month. 

MARKET DATA 

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Australia Cash rate
Australia 90 day bank bill
Australia 10 y bond
US 10y Govt bond
AUD/USD
AUD/EUR
AUD/JPY
AUD/CNY
ASX 200
S&P 500
Dow Jones
Shanghai Composite
Brent Oil (USD per BBL)
Gold Spot (USD per oz)
Iron Ore 60% MBIOI-IR index
USD/t (Updated Wednesday)

As at 8-Apr
2.00
2.25
2.40
1.72
0.7535
0.6627
81.91
4.8823
4937
2047.6
17576
2984
41.94
1240.69
52.19

As at 1-Apr
2.00
2.28
2.50
1.77
0.7651
0.6726
85.87
4.9458
4999
2078
17792
3009
38.67
1219
52.75