The Australian Central Bank kept rates at 2.75% in their latest policy announcement:
At its meeting today, the Board decided to leave the
cash rate unchanged at 2.75 per cent.
In Australia, growth over the past year has been a bit
below trend. The outlook published by the Bank last
month is for a similar performance in the near term
and recent data are consistent with this. The unemployment
rate has edged higher over the past year and growth
in labour costs has moderated. Inflation has been consistent
with the medium-term target and is expected to remain
so over the next one to two years.
The easing in monetary policy over the past 18 months
has supported interest-sensitive areas of spending
and has been reflected in portfolio shifts by savers
and higher asset values. Further effects can be expected
over time. The pace of borrowing has thus far remained
relatively subdued, though recently there have been
some signs of increased demand for finance by households.
The exchange rate has depreciated since the previous
Board meeting, although, as the Board has noted for
some time, it remains high considering the decline
in export prices that has taken place over the past
year and a half.
I'm bearish on Australia and the above comments don't change my mind. Growth is slowing a bit. My guess is the central bank is keeping their powder dry in the event they need to add further fuel to the fire.
Let's take a look at the relevant ETFs while we're here.
There are three important developments on the weekly chart. First, prices have broken the trend of the rally started in the spring of 2012. Since this break, prices have fallen to a Fib fan level for technical support. Most importantly, the weekly MACD has given a sell signal.
The daily chart shows the the exact same developments, but adds the further issue of prices now being below the 200 day EMA,