Aussie futures fall after cenbank rate cut

 Aussie bill and bond futures fell on Tuesday after the central bank said interest rate cuts would be modest going forward after it made a 25-basis-point reduction, which was also short of some investor's expectations.
New Zealand swap rates saw some receiving activity after a survey showed business confidence worsened to a 35-year low in the first quarter amid a deep and prolonged economic recession, backing the case for further rate cuts.
The Reserve Bank of Australia (RBA) said there was only scope for modest adjustment and that triggered a sell-off in the three-year contract which slipped 0.06 points to 96.34. The 10-year bond futures fell 0.02 points to 95.37.
The market had been deeply divided on whether the RBA would cut this time, having been surprised by its decision to skip an easing in March.
"We had expected a cut, but we had expected something a bit bigger," said Felicity Emmett, senior economist at the Royal Bank of Scotland.
"Going forward, it looks like they are going to space out their cuts a lot more, they are going to be a lot smaller and more widely spaced," she said.
In New Zealand, the two-year swaps fell by 6 basis points to 3.86 percent, and five-year swap was flat at 5.06 percent after the survey.
"It suggests the New Zealand economy will remain in recession/depression for at least another 12 months," said Annette Beacher, senior strategist with TD Securities.
"RBNZ expectations of a recovery in H2 this year are clearly proven to be unrealistic. H2 next year may not even be realistic," she said.
Interest rate swaps in Thailand saw some paying pressure ahead of the central bank's rate-setting meeting on Wednesday.
The one-year swap rose 7 bps to 2.12 percent and the five-year jumped to 3.18 percent from 2.90 percent.
"I am not surprised. A lot of authorities in the region would probably start considering a bottom to their policy rates," said Suresh Ramanathan, strategist at CIMB Investment Bank.
Seven of 11 economists polled by Reuters forecast the Bank of Thailand would cut its one-day repurchase rate by 25 basis points (bps) to 1.25 percent, while the remaining four saw a 50 bps reduction as the threat of higher inflation recedes.
In Singapore, 3-month dollars were quoted at 1.5741 percent, marginally down from Monday's 1.15870 percent, as risk appetite remained largely intact.
"This time around it is accompanied by moves in the fx market as well," said CIMB's Ramanathan. "We have seen the dollar weaken and the yen above 100. If the yen stays above 100 and funding costs remains low, this is very positive for risk appetite."
Korean cross-currency swaps for one year were steady at minus 0.50 percent as the country embarked on a $2 billion bond sale to feed its dollar requirements.
But rates are down from the level of plus 0.5 percent prevailing in mid-December. Local banks are still paying interest to swap won for dollars, rather than gaining a benefit for doing so as has been the case traditionally.