Credit Agricole CIB Research discusses the Australian economy trajectory amid the recent lockdown.
"Half of Australia’s population is already in lockdown in order to try and contain the virus. So, what matters the most for the currency at the moment is when the lockdowns will end; the retail sales data shows the damage they are already doing to the economy. Indeed, if Sydney’s lockdown lasts longer than six weeks, real GDP in Q3 will contract," CACIB notes.
"The market already expects the RBA to not taper its asset purchases further in November, so now it is a question of how long until the next taper or even if the RBA reverses its July tapering of asset purchases. We believe that the latter is unlikely," CACIB adds.