RBA Feb '10 Interest Rate decision

[drsmith]

Although not stated in the minutes I wonder whether the RBA board has softened its position on inflation in favour of growth (Can we now have both reasonable growth and low inflation ?). Moderate inflation would help in lowering the real value of debt and contain assets (house prices) without the obvious impact on nominal value. There's also income tax bracket creep for a Federal Government keen to raise taxes.

Higher inflation would also demand higher income return from investments to compete ultimately with rising interest rates. It will be interesting to see how quickly this is factored into equity valuations.

Some inflation is perhaps the least obviously painful way to cut real spending power and raise income taxes as it spreads the pain over a longer timescale.

 

[johnnyg]

about 25 secs in my charts which are probably slightly inaccurate. The first 30pips were pretty much instantaneous.

Cheers skc, do you think it would of been easy money for those with a quick enough connection and without trembling hands? :

 

[nunthewiser]

IF someone would be kind enough or can be bothered , is there any chance of posting up the currency chart AND the SPI chart on a 5 min timeframe FROM 45 mins before the announcement up until 30 mins after.

It might be very enlightening on just how confidential these desicions are.

I did mention the Dip earlier when it was occuring.

Thankyou in advance

 

[nunthewiser]

I can post the charts myself if no one intrested but you have seen my chart posting efforts already and they aint pretty.

worth a look though.

 

[johnnyg]

I'd be interested to see nun.

 

[Investor82]

Personally I couldnt be happier with the decision.
Interest rates stay low, USD/Aud crashes!!! I dont see how that is bad news for anyone (well for me anyway)...

 

[prawn_86]

Can someone who was watching the Currency (AUD/USD) tell me how quickly it dropped from the decision? Is it instantaneous? ie 100 pips in 2 seconds? ect

Pretty much. If you were long you wouldnt have had a chance to close your position before it dropped put it that way

 

[Tysonboss1]

I also am one of those scavenger types that dont mind picking the bones of the less fortunate that will get smacked if rates were to jump that fast .......

Im not here for a popularity contest so any moral arguments one may have towards my strategys in taking advantage of other peoples debt induced circumstances will fall on deaf ears

No judgement from me,

 

[skc]

Cheers skc, do you think it would of been easy money for those with a quick enough connection and without trembling hands? :

Sure if you had quick fingers or simply place a stop entry you can probably catch some of it today.

But over the long term you will have to test and see whether it is in fact a valid strategy. Plenty of times the market goes 50 pips one way (the way it should), snaps 75 pips back the other (the way it shouldn't) and wait 15 minutes before moving in the right direction again, leaving you in the wake.

News trading is an entire trading game of it's own... and it's not as easy as it looks.

 

[skyQuake]

Looking at tick data it was probably impossible to catch; the first tick gapped to 884, then ran a bit more. There was some gains to be made, could probably get filled at 882ish. But you need algos that interpret news to catch the early stuff.

 

[ThingyMajiggy]

IF someone would be kind enough or can be bothered , is there any chance of posting up the currency chart AND the SPI chart on a 5 min timeframe FROM 45 mins before the announcement up until 30 mins after.

It might be very enlightening on just how confidential these desicions are.

I did mention the Dip earlier when it was occuring.

Thankyou in advance

I'll give it a go too, but mine ain't nothing pretty either first chart is from http://www.dailyfx.com/charts/ second chart is SPI.

I believe I have the correct spots, feel free to correct me if I'm wrong though, anyone.

 

[nunthewiser]

Thanks Sam

Pretty sure the SPI started dipping about 15 mins before the RBA desicion earlier as was trading it via city cfd equivelant around that time . i did point it out in chat at time that it looked like it sprang a leak after travelling sideways in a narrow range for the hour b4 hand.


Thanks for that though .

 

[MRC & Co]

ouch!

Sorry to hear MRC

All good Frink, just got it all back today!

 

[professor_frink]

All good Frink, just got it all back today!

Nice MRC

 

[Timmy]

The minutes for this meeting are released.

Minutes of the Monetary Policy Meeting of the Reserve Bank Board
Sydney - 2 February 2010

Comment from The Australian
RBA minutes reveal 'finely balanced' decision to hold interest rates at 3.75pc

The idiot who was calling for a 0.5% rise, mainly to counter a potential housing bubble, was way off (hello ). The Minutes had this to say about house prices:

There were some tentative signs that parts of the housing market were seeing the effect of the decline in assistance to first home-buyers and higher interest rates, though high-end housing values were continuing to increase.