RBA's Lowe vs. Aussie vs. households 180% 'dark cloud' debt-to-income

Markets participants shift their attention to RBA's Lowe upcoming speech to gather evidence to either increase their long-Aussie positions or reduce them on the spot. As of writing, the AUD/USD pair, a commodity-linked currency, navigates the waters above 0.77 which increase the odds to expect a move higher towards 0.78 round figure.

Lowe's 'No further easing' rhetoric

Philip Lowe, RBA's governor, has been determined to avoid further easing and noted on wires that those days are behind the Australian economy, however, that rhetoric should be reviewed to identify where things could go south again.

Lowe's dilemma is to avoid further interest rate cuts to force households to reduce their spending and focus on savings and a more moderate consumption. That's an acceptable position that leads to another issue; a slowdown in their economy as the shift can quickly make individuals rethink their spending habits which could impact new home purchases, services, and retail sales.

Therefore, during today's speech, the key would be to identify what can push the RBA to consider rate cuts and what other indicators should lead to gauge a healthy Australian economy.

Australian dollar vs. American dollar at 0.78; what for?

On the other hand, China seems to balance their ongoing economic drama; lower GDP growth (per China's standard) and less consumption in Europe and the US. Today's trade activity between China-Australia represents a significant figure, if one were to pick a value, such could easily be way above the 35% mark on exports (considering that New Zealand is above 50%).

Then, why exactly is the exchange rate above 0.77? There is evidence to use the uptick in world trade, but that 'uptick' could be enough to be played as the fundamental flag when mining and the real estate fields signal important losses; time will tell as the pair navigates 'extremely overbought' waters.

If Greece debt is bad; Australia's household debt is a great contender

25 years of growth, no recession and prosperity have to clock a price tag, no economy is perfect, and the music seems to slow down for Aussies.

According to the latest wires, via Bloomberg, "household debt has surged to a record 187 percent of income and data Wednesday showed private wage growth at 1.8 percent, an all-time low."  Another focus today must be how the RBA monitors such 'problematic' development that has 2-decades on the making.

RBA's Lowes understands all the variables in place - to avoid the inevitable and go backward in his monetary policy the time has come to talk down a roaring Australian dollar.