Reserve Bank of Australia Governor Bullock is speaking to parliament. He is giving a prepared speech and answering questions. The RBA plans to gradually lower its cash rate, but no cuts are expected at the upcoming meeting later this month. In China, the People’s Bank of China will announce its Loan Prime Rate decision soon. Most expect interest rates to remain at 3.0% for the one-year term and 3.5% for the five-year term.

Economic Calendar Insights

The main policy rate for the People’s Bank of China is its Open Market Operations repo rate, currently at 1.4%. These updates are part of the economic calendar in Asia as of September 22, 2025. With Governor Bullock speaking, we look for hints of a slow, data-driven approach to rate cuts. The cash rate has dropped from its peak of 3.10% in 2024, following a decrease in inflation to 3.2%, which is still above target. Since no cut is expected this month, the RBA shows it is in no rush, especially with the unemployment rate rising slightly to 4.5% in the latest data. This cautious approach from the RBA indicates that implied volatility on the Australian dollar may be overvalued in the short term. Selling out-of-the-money options on the AUD/USD could be a smart move to earn premiums while the currency remains stable. This strategy worked well during earlier periods in 2024 when the RBA communicated its policies clearly, leading to minimal currency fluctuations.

Regional Monetary Policies

The People’s Bank of China’s decision further supports the idea of regional stability, as steady rates are widely anticipated. China’s Q2 2025 GDP growth of 4.8% indicates a fragile recovery. Authorities are leaning toward targeted support rather than broad monetary easing that could weaken the yuan. This approach likely limits the rise of Australian commodities, affecting the Australian dollar. In this environment, using interest rate futures to prepare for a slow decline in the Australian cash rate over the next six months seems wise. Traders could explore calendar spreads in ASX 30 Day Interbank Cash Rate Futures, betting that the market is too aggressive in forecasting near-term cuts, but reasonably aligns with predictions for mid-2026. This perspective aligns with the RBA’s historically cautious nature, as observed from 2023 to 2025, where they act with care, except in crisis situations. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now