Aussie bulls had their party cut short by the bears last week. Can this week’s catalysts give back its gains?
Here are economic themes and events you should pay attention to:
Quarterly CPI report (Oct 30, 12:30 am GMT)
Consumer prices rose by 0.6% in Q2 2019, which was a bit stronger than the 0.5% increase seen in the previous three months and what analysts had expected.
Annualized prices also clocked in at 1.6%, stronger than the 1.3% uptick seen in Q1 2019 and higher than expectations of a 1.5% increase.
The stronger-than-expected numbers helped boost the Aussie to new intraday highs until other catalysts dragged the comdoll lower in the later trading sessions.
This week market players expect to quarterly prices slip back to a 0.5% growth in Q3. Meanwhile, RBA’s closely watched trimmed mean CPI is expected to maintain its 0.4% and 1.6% quarterly and annual growth readings. Finally, the annualized headline figure is expected to improve from 1.6% to 1.7% for the period.
Remember that the Reserve Bank of Australia (RBA) sees prices “a little under 2 per cent over 2020 and a little above 2 per cent over 2021.” That means that, unless we see significant upside surprises for the report, then it’s likely that RBA will stick to its dovish stance in the foreseeable future.
China’s PMI releases
The world’s second largest economy is printing its first official manufacturing and non-manufacturing numbers for the month of October!
On October 31 at 1:00 am GMT the manufacturing PMI is expected to keep skating the 50.0 line at 49.8. The non-manufacturing PMI, on the other hand, could go back to its August reading of 53.8 after slipping to 53.7 in September.
Then, on November 1 at 1:45 pm GMT Caixin’s manufacturing PMI, an index that tracks smaller private factories, is expected to print a 50.9 reading after showing a 51.4 figure in September
Australia’s exports depend a lot on China’s demand, so hits or misses in this week’s reports could dictate the Aussie’s intraday price direction. Make sure you don’t miss the releases!