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

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Key data in Australia this week will be led by the release of June employment figures on Thursday.

Internationally, China has GDP figures for the June quarter tomorrow, while it’s a quieter week of data ahead in US, UK and European markets.

US stocks closed at a new record high on Friday, bonds rallied, and the US dollar index fell to a 10-month low after the release of US inflation figures and retail sales data.

Annual inflation came in at 1.6% after a reading of 1.9% in May, and remains below the US Federal Reserve’s stated inflation target of 2%.

Retails sales missed, recording a fall of 0.2% against a forecast 0.1% rise. The University of Michigan’s consumer sentiment survey also dipped by another two points.

The relatively poor data result followed US Fed Chair Janet Yellen’s two-day testimony to Congress, which was interpreted as somewhat dovish.

In addition to the Bank of Canada raising interest rates on Wednesday, Yellen’s comments were the main driver of market moves before Friday’s data release.

Pressure remains on the US dollar, while stocks were the beneficiary of the Fed’s more cautious approach to its monetary policy outlook.

Australia

A strong lead from US stocks has ASX futures traders betting that the local index will open higher to start the week, following a good session on Friday.

Meanwhile, the Aussie dollar got another lift from the US data result on Friday, climbing above US78 cents to close at its highest level since April 2016.

AUD/USD 30-Minute Chart

On Tuesday in Australia, the RBA will release the minutes from its July interest rate meeting when it kept the benchmark cash rate on hold at 1.5%. Analysts don’t expect the minutes to reveal much of a shift in the bank’s current neutral stance.

There’s also Westpac’s leading index for June on Wednesday, seen by the market as a guide for how the Australian economy will perform over the next 6-9 months.

While the index is still in positive territory, the May reading fell sharply which highlights the potential headwinds for the Australian economic growth outlook towards 2018.

Then markets will be keeping a close eye on Thursday’s employment figures in Australia, after the May jobs report smashed expectations.

The Australian economy added 42,000 jobs in May, with analysts forecasting another gain of 15,000 in June, with the unemployment rate expected to remain at 5.5%.

Here’s the schedule of this week’s data releases on the Australian calendar (via Commsec):

International

Internationally, China kicks off the week with a series of data release led by Q2 GDP data. The consensus forecast is for an annualised GDP growth rate of 6.8%.

There’s no headline data from the US this week. The UK has June inflation data on Tuesday while in Europe the European Central Bank meets on Thursday.

The market isn’t expecting the ECB to communicate any changes to interest rates or its bond purchasing program until its meeting in September.

Here’s the international calendar (also via Commsec):

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