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Aussie holds fort before RBA decision; bonds slip

Published: 02 Nov 2009 17:56:19 PST

__________AUSTRALIAN CREDIT/FOREX (0130 GMT) SNAPSHOT__________ FOREIGN EXCHANGE (against previous Sydney close) <AUD=> 0.9078/80 (0.9032/36) <AUDNZD=R>1.2558/73 (1.2543/57) <AUDJPY=R> 81.97/01 (81.22/31) <JPY=> 90.30/32 (89.93/98) <AUDEUR=R> 0.6130/34(0.6117/22) <EUR=> 1.4800/05 (1.4761/62) DEBT FUTURES CASH YIELDS 90-DAY BILL<YBAc1> (DEC) 95.76 (-0.02) <AU3MBB=RR> 3.70(3.68) 3-YR BOND <YTTc1> (DEC) 95.83 (-0.04) <AU3YT=RR> 5.05(5.02) 10-YR BOND <YTCc1> (DEC) 94.415(-0.035) <AU10YT=RR> 5.62(5.59) 3/10 SPREAD +0.415(+0.42) AUST/US 10-YR SPREAD +220(+218) S&P/ASX 200 4539.8 (4540.4) US10-YR <US10YT=RR> 3.42(3.41) ----------------------------Nov 3------------------------------

* Aussie bounces ahead of the outcome of the Reserve Bank of Australia's (RBA) monthly policy meeting, with most analysts and the market predicting rates to rise by 25 basis points to 3.25 percent. The decision will be announced at 2:30 p.m. (0330 GMT).

* Aussie firm at $0.9074, climbing back into an eight-month long upward trend channel, and off a low of $0.8985 hit offshore. [ID:nSYD436754]

* Daily MACD chart for Aussie signal local dollar may come under further selling pressure, but the weekly chart show its upward climb is frimly intact.

* A Reuters poll of 21 analysts on Friday found all expected the RBA to hike, with 16 tipping 25 basis points and four going for 50 basis points.

* A quarter point is fully priced in, and could actually see the Aussie dip on selling after the fact.

* The market has a one-in-five chance of a 50-basis-point hike <CSRBA=CSAU>, which would be a major surprise and would certainly send the Aussie higher while hammering bill and bond futures. * The statement will also be disected for guidance on the prospects of a hike in December, with the market currently priced for a move to 3.75 percent then.

* One-month overnight index swaps stood at 3.55 percent <AUDOIS>. November interbank futures <0#YIB:> were flat at 96.49, giving an implied rate of 3.5 percent.

* Three-year bond futures <YTTc1> fell 0.03 points to 94.84. The 10-year contract <YTCc1> lost 0.035 points to 94.415.