Can Aussie bulls extend their party this week? Here are potential catalysts that could influence the comdoll’s price action.
Quarterly CPI (Jan. 30, 1:30 am GMT)
Slower housing price growth weighed on the CPI basket in Q3 2018, limiting its growth to 0.4% against the 0.5% uptick that many had expected.
The Reserve Bank of Australia (RBA)’s trimmed mean (down from 1.9% to 1.8%) and weighed mean (down from 1.9% to 1.7%) indices also underperformed and projected less pressure on the central bank to raise its rates.
The release, combined with concerns for China’s economic growth and a weak day for the comdolls, attracted a lot of bears to the Aussie’s yard last October.
This week market geeks see Australia maintaining its 0.4% quarterly CPI even as the annualized reading is expected to slow down from 1.9% to 1.7%.
NAB’s out-of-cycle interest rate increase brought the possibility of an RBA rate cut on the table last week. If this week’s CPI reports significantly miss analysts’ expectations, talks of a rate cut could intensify and weigh on the Aussie across the board.
China’s PMI reports (Jan. 31, 2:00 am GMT)
Who’s up for trading China’s official PMI reports? Market bees are buzzing about the official manufacturing slowing down from 49.4 to 49.3 in January.
Meanwhile, the non-manufacturing PMI is seen to edge higher for another month, this time from 53.8 to 53.9.
We know from last week’s releases that Aussie traders tend to get jittery on weak Chinese data releases. And now that the U.S. government is up and running again, more traders could concentrate on the (lack of) progress in the U.S.-China trade negotiations and its impact on the world’s largest economies.
If this week’s PMIs widely miss its estimates, then we could see a bit of weakness for the comdoll.
Missed last week’s price action? Read AUD’s price recap for Jan. 21-25!