No RBA shock on Melbourne Cup day

“The RBA may also need to offset regulatory driven increases in bank mortgage rates”.

In the meantime, the Federal Bureau of Investigation plans to review more emails related to Hillary Clinton’s private server, just a week before the elections which has reduced earlier expectations of her victory. We are talking about the AUD/USD Forex market.

Officials expect to raise their benchmark rate by a quarter percentage point this year from a current target range of 0.25 percent to 0.5 percent, according to quarterly projections released in September. “Economic growth in Australia looks reasonable, with the worst of the mining investment slump behind us and a rise in commodity prices is starting to boost national income again”, Mr Oliver said.

After the US and United Kingdom economies showed better than expected growth in the third quarter, investors turn their attention to monetary policy actions.

She said that was a “modestly dovish” comment, albeit one offset by the RBA’s repeat observation that “forward-looking indicators point to continued expansion in employment in the near term”.

Fed Chair Janet Yellen and the rest of the Fed’s policy-setters appear to have left themselves the December meeting to deliver a rate rise in 2016, with hardly anyone expecting a move only a week before the November 8 election.

The Fed is also likely to want to wait for Friday’s jobs report, which if strong enough should bolster expectations that the central bank will lift rates in December.

Nomura chief United States economist Lewis Alexander, also formerly with the Fed, said that with investors expecting a December move, the Fed probably will not feel that it needs to lock in its intentions any more than necessary.

The Reserve Bank is more hawkish about the economy and inflation in its latest rates decision, indicating interest rates may have bottomed out, economists say.

The Reserve Bank has changed the cash rate six times out of the past 10 Melbourne Cup days.

The yen was slightly lower, with USD/JPY up 0.215 to 105.03, just shy of Friday’s three-month highs of 105.52.

The growing divergence in monetary policy stances between the Federal Reserve and nearly every other major G10 central bank has re-emerged as the main driver in the currency markets. “Bond market inflation breakeven spreads, although still too low in our view, have nonetheless moved up to 2016 highs”. “Given the Q3 inflation data, the RBA is likely to nudge its inflation forecasts lower in the Statement on Monetary Policy next week”.

“There were a few economists expecting a cut (from the RBA).so the fact they didn’t provided a bit of relief for the currency”, said Dominic Bunning, a currency strategist with HSBC in London.

It appears the housing market has returned to the forefront of the RBA’s thinking, after the bank had played down price growth in Sydney and Melbourne repeatedly over recent months.