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Busy week next week highlighted by rate announcements and employment reports

RBA and RBNZ to announce rate decisions

It is busy week next week with rate announcements from the Reserve Bank of Australia and also the Reserve Bank of New Zealand. It is also employment week for both Canada and the US.  China is on holiday Monday to Thursday. Australia will be off on Monday.
Monday, October 4
  • OPEC+ meeting all day
  • Spain’s unemployment change, 3 AM ET/ 0700 GMT
Tuesday, October 5
  • Reserve Bank of Australia rate decision, 11:30 PM ET Monday/0330 GMT.  Rate expected to remain steady at 0.10%
  • US ISM services PMI for September.  Estimate 59.9 versus 61.7 last month.  10 AM ET/1400 GMT
  • ECB’s Lagarde speaks, 11 AM ET/1500 GMT
  • FOMC Quarles speaks, 1:15 PM ET/1715 GMT
Wednesday, October 6
  • RBNZ rate decision, expected 0.25% hike to 0.5% from 0.25%.  9 PM ET/0100 GMT
  • ADP nonfarm employment change, estimate 455K versus 374K last month. 8:15 AM ET/1215 GMT
  • US crude oil inventories, 10:30 AM ET
Thursday, October 7
  • US unemployment claims. Estimate 350K versus 362K last week.  8:30 AM ET/1230 GMT
  • Canada Ivey PMI. Estimate 60.3 versus 66.0 last month. 10 AM ET/1400 GMT
  • BOC Macklem schedule to speak.  12 PM ET/1600 GMT
Friday, October 8
  • RBA financial stability review, 8:30 PM ET/0030 GMT
  • Canada employment change.  Estimate 61.2K vs 90.2 last month.  8:30 AM ET/1230 GMT
  • Canada unemployment rate.  Estimate 6.9% versus 7.1% last month
  • US nonfarm payroll. Estimate 490K versus 235K last month.  8:30 AM ET/1230 GMT
  • US unemployment rate.  Estimate 5.1% versus 5.2% last month. 8:30 AM ET/1230 GMT
  • US average hourly earnings, estimate 0.4% versus 0.6% last month.  8:30 AM ET/1230 GMT

RBA leaves cash rate unchanged at 1.00% as expected

The RBA announces its latest monetary policy decision – 3 September 2019

  • Prior 1.00%
  • To ease policy if needed to support sustainable growth
  • It is reasonable to expect an extended period of low rates
  • Risks are to the downside for the global economy
  • Outlook for global economy is reasonable
  • Global financial conditions remain accommodative
  • Inflation is likely to be subdued for some time
  • Outlook for consumption remains main domestic uncertainty
  • Further lift in wages growth will be welcome
  • AUD is at its lowest level of recent times
  • Central scenario is for underlying inflation to be a little under 2% in 2020
At first glance, there isn’t any major changes to the statement as the RBA continues to keep the key passage of easing policy further “if needed”. This still puts November as the likely timeline for the central bank’s next move if current conditions continue to play out.
Essentially, nothing much has changed but the RBA is acknowledging some better conditions in the housing market at least but consumption/household debt and inflation remains a key problem for the economy still.
AUD/USD has moved up a little to 0.6710 from 0.6695 earlier but there isn’t much to suggest a significant move to the upside for now.

RBA cuts cash rate by 25 bps from 1.25% to 1.00%

RBA announces its latest monetary policy decision – 2 July 2019

  • Prior 1.25%
  • Says rate cut will help to make inroads into spare capacity
  • Says rate cut will help achieve progress towards inflation target
  • Says rate cut is to support jobs, bring inflation back in-line with target
  • Says rate cut will help quicken reduction in unemployment
  • Notes that inflation pressures are subdued across the economy
  • Sees underlying inflation at 2% in 2020
  • But expects inflation to pick up, boosted by petrol prices in Q2
  • To adjust policy if needed to support growth, inflation
  • Central scenario for Australian economy remains reasonable
  • Tentative signs of house prices stabilising in Sydney, Melbourne
  • AUD at the lower end of narrow range
More details to come…