Late surge makes for a bullish close on Wall St, AUDUSD awaits 2:30pm rate decision, ASX futures up 42 points

In today's first 10-minute chart you can see that the S&P 500 (black line) took a turn and leapt higher at around 6am this morning, and the ASX SPI 200 futures (orange line) followed suit. As a result we have a strong open of +41 points today with the caveat being that the RBA doesn't disappoint the market by leaving rates unchanged. Personally, and it's a gamble to discuss this, I don't see a great need for the RBA to cut rates. Inflation is not forcing them to cut rates - it's low, but not dangerously so. Unemployment is looking ok and the level of the AUDUSD is around the level that Glenn Stevens previously wished it to. So therefore, the RBA has to 'want' rather than 'need' to cut rates, which it would do if it genuinely believed that Australian consumers would respond very positively to it, or if it felt as though the economy is going to get worse over coming months and it wants to get ahead of the curve.

Today's second chart shows the jump in the 30-day interbank cash rate - as its price has risen, so too has the Australian dollar fallen, which combined have led broad market expectations of an RBA cut. However, the majority of economists surveyed by Bloomberg are predicting a 'no change' result from the meeting today, and now it is up to traders to decide whether to listen to the market or listen to the economists.

Finally I've included a chart of the USDJPY currency pair, showing just how quiet this trade has become since the spotlight turned on Europe. The range on the USDJPY (orange) is so well-bound that it almost looks like a data feed error, while the EURUSD currency pair has found a comfortable spot in the US$1.1250-US$1.350 range. It is likely that Europe will be in a state of flux for weeks. The Greek government has just been elected based on promises to inflict no more austerity measures on its people in exchange for further funding from the ECB, IMF and European Commission. It can't just turn around now and accept whatever structural reform requests that these three institutions make, so it must be seen to be arguing against them for at least a few weeks. Greece will not snub continued funding offers from its creditors, it can't afford to, economically or politically. So it must just argue for a while - I think the market knows this and as a result Europe has gone a little quiet.

Today’s charts are taken from the Rivkin Trader platform. 30,000 global instruments available to trade including FX, commodities, index, ETFs and international shares. Trade Australian share CFDs from just $8 or 0.10%. Click here or phone 1300 748 546 to get your free $100,000 demo account.

Upcoming economic announcements: AU trade balance at 11:30am, Australian interest rate decision at 2:30pm, Swiss trade balance at 6pm, all Sydney time.

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