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The day ahead eyes Aussie and RBA first up - Rabobank

FXStreet (Barcelona) - Analysts at Rabobank explained the upcoming key events.

Key Quotes:

“Today’s next focus is Aussie home loans, seen +0.6% MoM after a flat reading last month. The importance of this series is even greater than usual given that we know the trade picture is looking ugly, and the labour market is also flagging, apparently, which leaves the Australian economy with a lot of bricks and mortar all in one basket. We then get the RBA’s Statement on Monetary Policy (SoMP), where we will be looking to see if there is any subtle hawkish or dovish shift in its views relative to the previous release. Whether they knew unemployment was going to be 6.4% when they wrote it is a key question, of course”.

“China will release trade data at some point today (so no popping out for a cup of tea anyone). Exports are seen +7.0% YoY and imports +2.6% - there may still be question-marks over the data quality, but the ‘magic’ of currency depreciation likely also helps”.

“German trade data are also out, and a traditional enormous surplus (EUR18.9bn) is expected; that will be mirrored later by a big trade deficit in the UK (-GBP2,050m)”.

“Then the BOJ have their monetary policy statement. That is likely to remain upbeat, despite recent data, which will tell the markets not to expect any extra QE any time soon. (Note that almost none of this Japanese QE is leaking abroad anyway according to our research, but the prospect of it certainly seems to excite – and the prospect of not getting more of something - that one is not getting anyway – may have a dampening effect)”.

“In the US we see non-farm productivity and labour costsfor Q2. The latter are expected at 1.1%, down from a 5.7% leap in Q1 – any upside surprise will likely hit the markets hard given poor sentiment and the current focus on wage ‘inflation’. Have a happy (and safe) Friday!”

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