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

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It’s a quiet week of key data points ahead domestically, with the main focus on minutes from the RBA’s September meeting on Tuesday.

Key data abroad will be led by the US Federal Reserve’s interest rate announcement on Wednesday night AEST.

US stocks continued on their merry way to end the week, as the S&P500 set its fourth record high in five sessions and closed above 2,500 for the first time ever.

Global stock sentiment remains broadly positive for now, although major central banks have indicated no changes to their current plans for a steady tightening of monetary policy.

Strength in the UK pound — it hit a pre-brexit high against the USD on Friday — weighed on the US dollar index, although the greenback gained 2.8% against the safe-have Japanese yen with markets indifferent to Friday’s missile launch by North Korea.

The Aussie dollar traded in a narrow range on Friday night and will start the week at just over US80 cents.

Australia

The minutes from the Reserve Bank’s September meeting will be released on Tuesday at 11:30am AEST.

It follows another relatively neutral statement from the bank on September 4, which accompanied the announcement that benchmark interest rates would be kept on hold at 1.5%.

So the minutes are unlikely to reveal a significant change from the bank’s current stance.

However, the market will be looking for any notable shifts in tone, given that the forecast for any moves in interest rates next year is currently leaning to the upside.

Markets are also likely to watch a speech by RBA governor Philip Lowe in Perth on Thursday (3:10pm AEST), curiously titled “The Next Chapter”.

Here’s the domestic calendar this week, via ANZ:

International

Bank of England (BoE) governor Mark Carney kicks off the week with a speech in Washington on Monday night.

His speech is likely to be analysed for any more clues on the BoE’s plans to hike rates, after bullish comments by BoE committee members at last week’s interest rate announcement saw the probability of a November rate increase rise significantly.

Then the US Federal Reserve makes its monthly interest rate announcement on Wednesday night.

Every analyst surveyed by Bloomberg forecast rates to stay on hold at 1.5%, but markets are expecting the Fed to announce the tapering of its bond purchasing program

According to ANZ analysts Daniel Been and Giulia Lavinia Specchia, any reduction will be gradual and so the initial impact on markets will be small.

On Thursday New Zealand has Q2 GDP figures, with the New Zealand central bank forecasting solid quarterly growth of 0.9%. That’s ahead of a federal election next Saturday, with polls currently showing that the result is too close to call.

Also on Thursday the Bank of Japan makes its interest rate announcement. Rates are expected to stay on hold at -0.1% with no changes to the bank’s yield-curve control program to keep 10-year bond yields around zero percent.

On Friday after Asian markets close, there’s three US Fed speakers and Canada has inflation data for August.

Full international calendar below:

Data from ANZ

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