AUSTRALIAN DIARY: Everything you need to know about the week ahead for markets

(Photo by Dean Mouhtaropoulos / Getty Images)

The Reserve Bank of Australia will be back in focus this week, starting with its monthly interest rate meeting on Tuesday (2:30pm AEST).

Internationally, US-China trade tensions look set to remain in the spotlight. China flagged retaliatory tariffs on around $US60 billion of US goods to end the week, in response to the latest trade threat from President Trump.

China’s central bank also stepped in to support its currency, which saw the yuan gain back ground against the US dollar.

US jobs data for July missed estimates on Friday night. possibly weighed down by the collapse of Toys R Us. The unemployment rate hovered near an 18-year low and wage growth held steady, reinforcing the US economy’s current trajectory of steady growth with low inflation.

The market reaction to US employment figures was relatively muted as bond yields fell and stocks rose to end the week. ASX futures traders have marked the local index higher ahead of Monday’s open.

To the week ahead:

Australia

In addition to Tuesday’s policy meeting, the RBA will also release its latest set of economic projections on Friday (11:30am AEST) in the quarterly Statement on Monetary Policy (SoMP).

There’s also a speech from RBA Governor Philip Lowe on Wednesday (1:05pm AEST) called “Demographic change and recent monetary policy”, followed by a Q&A.

“Plenty to sift through, but the conclusion at week’s end will be the same,” said CBA chief economist Michael Blythe.

“The cash rate will be left at 1.5% on Tuesday. The RBA will send a positive economic message indicating that the next move is more likely to be up than down, but there is no case for any near-term adjustment.”

Blythe expects the RBA’s economic projections on Friday “to still show GDP growth running at a sustainable, above trend pace — around 3% per year — through 2018 and 2019.”

International

Amid ongoing tensions with the US, markets will be closely watching Chinese trade data for July, out on Wednesday. China recorded its biggest ever trade surplus with the US in June.

And the Reserve Bank of New Zealand will make its interest rate announcement on Thursday. Rates are expected to stay on hold at 1.7%, as growth slows while inflationary forces remain evident.

The statement is a “must-watch” for currency traders, ANZ said, “as we attempt to work out how sensitive the bank is to shifts in growth and inflation, particularly as the market gets to know the new governor”.

Key data out of the US will be led by July inflation numbers, which don’t come out until Friday night. The forecast is for a modest 0.2% rise in core CPI for the month, leaving the annual growth rate at 2.3%.

Here’s the full calendar, via ANZ (key events for currency traders in dark blue).

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