Australia is in for a pretty busy week! Here are the possible market-movers you need to watch out for:
RBA statement (Oct. 2, 4:30 am GMT)
Even though members believe that the increases would unwind “about half of the decline observed in the average housing loan rate over the preceding year,” they also maintained that “the next move in the cash rate would more likely be an increase than a decrease.”
Not a lot of traders are expecting the central bank to change its tune this week. So unless Governor Lowe and his team surprise us with hints of changes in their biases, then we’ll likely see limited reaction from the Aussie.
Trade balance (Oct. 4, 1:30 am GMT)
In last month’s release, we saw how a better-than-expected trade balance data was NOT enough to offset concerns over the impact of the U.S.-China trade war on the economy.
This week market players expect to see Australia’s trade surplus narrow down from 1.55B AUD to 1.45B AUD in August.
More than the headline numbers, you might also want to pay attention to export demand from China, Australia’s largest trading partner.
A weakening demand could increase investor jitters, while resilient numbers could help keep the Aussie afloat against its major counterparts.
Retail sales (Oct. 5, 1:30 am GMT)
Australia’s retail sales was one of many printed in a data dump last month, so its slowdown from 0.4% to 0.0% in July was offset by a positive quarterly report.
The retail sales data will go solo this time around, however. Analysts expect to see a 0.3% growth in August, which is what market geeks had also expected in last month’s release.
There won’t be other top-tier data from Australia during the session, so it’s likely that we’ll see some Aussie action on significant data hits or misses.
On the other hand, the retail numbers will be printed hours before the monster U.S. NFP report. That means y’all gotta watch out for some profit-taking if we do see strong intraday moves!
Last Week’s Price Review
The Aussie is currently in third-to-last place (as of 6:00 am GMT), so the Aussie’s two-week winning streak may soon be coming to an end.
The Aussie’s price action is a chaotic mess this week. There are even clear instances when AUD pairs had diverging price action. And that implies that the Aussie was vulnerable to its peers.
Also, most AUD pairs were basically range-bound throughout the week, probably because traders were focusing on the major events for the other currencies and because there was barely anything on the calendar for the Aussie.
The while the Aussie did take some directional cues from gold and the yuan, the Aussie didn’t really seem to track gold prices or the yuan too closely this week. And it probably didn’t help that the yuan was also mostly range-bound.
With that said, there were some instances of uniform AUD price action. The Aussie, for example, started the week by gapping lower on most pairs, thanks to news over the weekend that China cancelled trade talks. However, selling pressure was only limited and the Aussie’s price action became a mixed mess after that.
The Aussie was also a secondary beneficiary when ANZ’s Business Outlook Survey revealed a not-too-negative reading for business confidence in New Zealand.
And the Aussie jumped broadly higher when the Greenback slumped in wake of the FOMC Statement. However, the Aussie also quickly erased those gains when the Greenback bounced back.
The Aussie also slumped broadly lower on Thursday when the Greenback surged higher across the board after rumors spread that Italy’s budget meeting will be delayed. But as has been the case this week, the Aussie’s price action quickly became mixed.
Most AUD pairs also appear to be tilting higher on Friday, probably because of the risk-on vibes in Asia and because gold prices and the yuan were also tilting upward.
Hopefully, we’ll get more uniform price action from the Aussie next week since another RBA statement is coming our way and Australia will also be releasing its retail sales report.