The Reserve Bank of Australia is anticipated to keep its cash rate unchanged today. The Commonwealth Bank of Australia projects a dovish tone from the RBA, with public sentiment indicating stability in interest rates.
Westpac views the upcoming RBA meeting as a “dead rubber”, expecting a potential rate reduction in May. Goldman Sachs has revised its forecast for an RBA rate cut from April to May.
Expectations For Chinese Manufacturing Data
In China, the Caixin Manufacturing PMI is expected to show improvement, aligning with the March Manufacturing PMI of 50.5, which met expectations. The economic calendar for Asia on April 1, 2025, includes these significant events and their associated forecasts.
The Reserve Bank’s decision to likely hold rates steady aligns with broader expectations that inflation pressures are softening, though not rapidly. Commonwealth’s stance on a more cautious central bank suggests that officials are not yet ready to shift policy, preferring to see more data before taking a step either way. This gives us a hint: volatility around rate decision days may decrease in the short term, at least locally.
Westpac’s description of the meeting as a “dead rubber” implies little market reaction is expected, with attention already shifting to action in the months ahead. Their expectation of a move in May gives a clear time reference that may affect volatility pricing and skew distribution in shorter-term options. Goldman’s adjustment of their cut forecast to align with this view adds weight to that timing scenario, further anchoring expectations.
Meanwhile, data from China could reinforce risk sentiment in the Asia-Pacific region. The Caixin PMI, if it continues to show mild expansion above the 50 line, reduces the likelihood of stimulus surprises and may help support regional equity markets. This matters for us, because positive global data can dampen implied volatility levels, especially when combined with fiat stability from major central banks.
Market Positioning And Timing Signals
April 1st will be watched not just for the release of the Caixin figures, but also for how that data fits into the broader story of stabilising or recovering output in Asia. A modest upside in the Caixin survey, when layered alongside Beijing’s recent growth signals, gives us more confidence to price in tighter call spreads and potentially reconsider downside hedging costs ahead of Q2.
We need to keep an eye on forward rate pricing; the May cut views are becoming more dominant, and OIS curves may begin to flatten as a result. Short-dated options seem less sensitive, at least until hard data or a hawkish shift forces repricing.
There are also some changes expected in positioning across Aussie rates futures, especially if traders decide to get ahead of a dovish May. If we see volume build up in the belly of the curve, it might indicate early positioning towards that outcome. For us, it’s a reminder that even quiet meetings leave a trace worth studying.
The takeaway is not that nothing is happening, but rather that the value lies in timing— a few weeks too early or too late, and the skew risk increases. So small signals, like revised forecasts or minor beats in data, become more valuable than ever. Keep alert to the edges; that’s where most mispricings start.
