NFP Report to Probably Steal the Limelight From BoE and RBA
XM Group | Jul 28, 2023 08:33AM ET
Another close call for the RBA?
The Reserve Bank of Australia meets on Tuesday for its August policy decision and markets and economists are split as to what the outcome will be. Analysts are predicting a 25-basis-point increase in the cash rate to 4.35% following a pause in July. However, the minutes of the July meeting revealed the decision was a close call and that the Board would “reassess the situation” in August.
However, underlying inflation is proving to be a lot stickier as core CPI that excludes all volatile items such as food and energy edged up in June to 5.5%. It is forecast to inch lower to 5.4% in July, but any upside surprises could lead to some scaling back of bets that the ECB is done raising rates.
Preliminary GDP estimates for the second quarter are also released on Monday. Economic growth was flat in the first quarter, but GDP likely managed a modest expansion of 0.1% in the three months to June.
With future rate hikes hanging in the balance, the euro will be very sensitive to price and growth indicators in the run up to the September meeting.
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