BOJ Raises Interest Rates to 1% as Inflation Pressures Persist 
Urban studies: Doing research when every city is different 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
RBI Hits Pause as Geopolitical Storm Clouds Gather 
BoE Policymaker Alan Taylor Signals No Need for Interest Rate Hike Amid Iran War Inflation Risks 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
China Keeps Loan Prime Rates Unchanged for 13th Straight Month as Policymakers Prioritize Credit Demand Recovery 
BOJ Rate Hike Expectations Rise as Weak Yen and Strong U.S. Jobs Data Increase Pressure 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
RBA Minutes Signal Australia Central Bank Remains Ready to Raise Interest Rates if Inflation Persists 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
US Gas Market Poised for Supercycle: Bernstein Analysts 
ECB Set to Raise Interest Rates as Energy Shock Fuels Eurozone Inflation Concerns 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
This week’s major events are RBA and BoC’s monetary policies. RBA policy decision is universally expected to be on hold as the Board continues to monitor the impact of the previous three rate cuts on the economy. Q3 balance of payments are expected to show net exports adding 0.1ppts to GDP while the current account posts a back-to-back surplus of $6.1bn. Q3 public demand is expected to rise 0.9% and is the last GDP partial ahead of tomorrow’s final release.
The Aussie has bounced around 2 cents since early October, aided by a more positive tone on US-China trade talks and the unexpected Brexit breakthrough which has bolstered global risk appetite. AUD should remain supported near term but any trade in the 0.6950/0.7000 area is likely to attract substantial sellers. While supply interruptions could limit the recent fall in iron ore prices, coal prices remain near 3-year lows and we expect the US and China to reach only a very limited trade agreement in coming weeks.
Moreover, the RBA does not want to encourage an A$ revival and pricing for another rate cut has been unwound too far, as we still expect a rate cut in February 2020.
Trade tips:
Buy a 3m AUD/JPY put spread (72.0/69.5) (spot ref: 74.800); sell a 3m 1.0975 AUD/NZD call (spot ref: 1.0500).
In yet another trading perspective, at spot reference of AUDUSD: 0.6860 levels, bidding momentary bullish rationale, it is advisable to execute one-touch call options strategy with upper strikes at 0.6890 levels, thereby, one can fetch certain yields as long as the underlying spot FX keeps spiking on the expiration.
Alternatively, on hedging grounds ahead of RBA’s monetary policy that is scheduled for the next week, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards below 0.66 levels in the medium run. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position. Courtesy: Westpac
