Forex Market Update

RBA steers a "middle course" with a 25bp rate cut

BOJ stands pat but broadens collateral accepted for liquidity operations

MAJOR HEADLINES – PREVIOUS SESSION

• CA Feb. Building Permits out at -15.9% m/m vs. -4.0% expected and revised -6.0% prior
• CA Ivey Mar. PMI out at 43.2 vs. 47.0 expected and 45.2 prior
• NZ NZIER Q1 Business Opinion Survey out at -65 vs. -64 prior
• AU AiG Mar. Construction Performance Index out at 30.4 vs. 29.5 prior
• JP Mar Official Reserves out at $1.018 tln vs. $1.009 tkn prior
• JP BOJ leaves o/n call rate target unchanged at 0.1%, as expected
• AU RBA cuts official cash rates by 25bp to 3.0%
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THEMES TO WATCH – UPCOMING SESSION

• Sweden Budget balance (0730)
• Norway Ind Production Manufacturing (0800)
• UK Industrial/manufacturing Production (0830)
• EU Euro-zone final Q4 GDP (0900)
• IS IBD/TIPP Economic Optimism (1400)
• US Consumer Credit (1900)

Market Comment:

In his speech at an investor conference overnight, Fed Gov Kevin Warsh blamed the “panic” that hit financial markets in late-2007 for contributing to, and then magnifying, the depth of the recession. Warsh clearly laid the blame on “faulty private practices and flawed public policies” and concluded with an admonition to fellow policymakers that their policy preferences must be communicated clearly, credibly and consistently and

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