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Forex Flash: RBA on hold while market digests overnight events – UBS

FXstreet.com (Barcelona) - The RBA kept its policy rate on hold overnight, fully in line with expectations. The central bank also kept its easing bias, and while immediate price action suggests some investors were positioned for a more adverse outlook, the currency had already been performing well in the run-up in what has been a sluggish session overnight in Asia.

Overnight, new BoJ Governor Kuroda was also on the wires, noting that the BoJ will do 'whatever it can' to beat deflation and conduct 'bold easing', though it may take 2 years to achieve its new price target. According to Research Analyst Gareth Berry at UBS, “Much of his rhetoric is not new and markets are still assessing how he can surpass expectations at this week's BoJ meeting and arrest the JPY's recent gains.”

With Europe returning from holidays today, much of the emphasis was be on data prints, especially with the crucial ECB decision on Thursday where some parts of the market expect a cut to be on the agenda. Consensus surveys are certainly not unanimous in expecting unchanged rates. Draghi's own personal views on the handling of Cyprus will also be under scrutiny.

European Morning Wrap: Central banks with a twist of Italy

Central banks will be getting almost all attention this week and the main focus of this morning’s institutional reports lies on them, with a little twist of Italy.
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Forex Flash: CBR cuts 25bp on some LTRO rates – TD Securities

The Central Bank of Russia kept its rates unchanged as expected, but lowered by 25bp the rates on some long-term refinancing operations, “which the Bank does not expect to significantly affect money-market interest rates, but will lower the costs of financing for credit institutions, making monetary policy more effective”, according to TD Securities analysts. “There was speculation ahead of the announcement that the CBR may cut rates today, justifying the spike in yields after the announcement, as these expectations were disappointed. However, the CBR removed from their statement the sentence that "the current level of money market interest rates is appropriate for achieving the balance of the main macroeconomic risks", opening the way to lower rates in May or (more likely) in June”, wrote analyst Tim Davis.
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