FXStreet (Delhi) – Research Team at NAB/BNZ, expects that RBA sees 'scope' for further easing, but we doubt it will be exercised with February marking the first 'live' meeting, but December easing unlikely. We like tactical AUD outperformance as shorts squeezed, particularly against NZD and EUR, the team further adds. Key Quotes “NAB Economics sees February as first ‘live’ meeting. We read the November RBA Statement positively, despite the flagging of ‘scope’ (to ease). With indicators from the non-mining economy relatively strong, we believe it would take a material deterioration in the local economy (or major development offshore) for the RBA to exercise its scope.” “We still like the idea of short-term AUD outperformance, especially on the crosses, with the caveat that renewed pressure on Asia EM currencies would likely blow back negatively onto the AUD. And while AUD/JPY would suffer on any spike in risk aversion, we have protection here via a stop now raised to ¥86.30, above our ¥85.95 entry point.” “Another expression of our view would be through AUD/NZD, which recently broke up through important resistance at the 200-day moving average. Our short-term ‘fair value’ model stills sits well north of current spot rates, at 1.1130, consistent with the signals given by short-end AU-NZ rate spreads.” “Alternatively, we are watching AUD/EUR heading into the December RBA and ECB meetings, on the premise that the RBA will hold, and the ECB will deliver some further easing. Volatility still the key to breaking AUD/USD range.” “We continue to stress AUD’s sensitivity to broader market volatility. Through October, the VIX’s fall from 24.6 to 14.6 drove our ‘fair value’ estimates of AUD/USD higher in the order of 4 cents. With equity indices back at or near August highs, we’d be wary of deteriorating sentiment. That has the greatest potential to break AUD/USD out of the 0.70 – 0.74 range.” For more information, read our latest forex news.