AUD Flows: Focus on RBA v Fed

Elsewhere, the AUD has started to edge higher after the correction off recent highs against the USD. Though China manufacturing PMI was on the soft side, traders note that relative RBA to Fed rate prospects are more important and all the signs point to the RBA being slower than the Fed in easing in the next 6-9 months due to Aussie inflation.   In the next year, the money market is discounting 200bps of Fed easing versus 80bps from the RBA.  Short-term overbought pressures remain though multi week we see scope for a test of Dec 2023 high at 0.8671.