Can the Aussie continue to defy gravity and gain pips despite an RBA rate cut? Here are this week’s potential catalysts!
Private capital expenditure (May 30, 2:30 am GMT)
For newbies out there, you should know that the quarterly report details expenditures made by private businesses and is a pretty good indicator or business confidence and future economic activity.
In the previous release we found out that CAPEX was up by 2.0% in Q4 2018, much higher than the expected 1.0% increase and the 0.5% uptick seen in Q3 2018.
This week analysts expect to see a 0.5% gain in Q1 2019.
Before you buy or sell the Aussie like there’s no tomorrow, though, you should know that the positive effects of the previous release was drowned out by weaker-than-expected Chinese PMI reports. Which brings me to the next catalyst:
China’s PMI reports (May 31, 2:00 am GMT)
While we wait for updates on the U.S.-China trade negotiations, traders will look at China’s manufacturing and non-manufacturing PMIs for clues on how the second-largest economy is affected by the previous weeks’ tensions.
Analysts see the manufacturing PMI falling from 50.1 to a contractionary reading of 49.9, while the non-manufacturing report is expected to maintain its 54.3 index figure.
Since traders can’t trade the Chinese yuan as easily as they could the Aussie, the comdoll will likely stand in for any upside or downside surprises from this week’s Chinese releases.
Missed last week’s price action? Read AUD’s price recap for (May 20 – 24)!