From David Scutt, Treasury Dealer at Arab Bank, here’s a quick run-through of what the Australian market will be yakking about this morning, including sales figures from China and how Tabcorp performed last year.
Have a great day.
The RBA will release their quarterly statement of monetary policy at 11.30am. While we know it’ll be dovish, they just cut rates only three days ago, keep an eye out for any revisions to unemployment, GDP and CPI, likely to be upward, downward and potentially upward for CPI, along with language on the strength of the non-mining sectors and of course, China.
China dominates the regional data calendar today with the release of CPI, PPI, retail sales, industrial production and fixed-asset investment numbers. While it has taken a backseat to other releases of late, we expect CPI to garner plenty of attention when it is released at 11.30am with markets likely to get excited by further moderation as it’ll no doubt prompt renewed rumours of further stimulus from the PBoC. Later in the session we’ll also receive retail sales and industrial production data at 3.30pm, expected to expand 13.5% and 9% respectively on year, with markets likely to react positively to any outcome given they’ll either indicate a stabilisation in growth or the need for further stimulus. Besides the Chinese data, markets will also have to digest Japanese consumer confidence along with the BoJ monthly survey.
Tabcorp headlines the domestic earnings calendar today.
The ASX 200 looks set to finish the week firmly in the black with SPI futures pointing to a rise of 19pts on the open. While this is a punchy increase on top of what we saw yesterday, with markets likely to take a ‘stimulus or stabilisation’ approach towards the Chinese data today, it really wouldn’t surprise to see gains, albeit modest, held into the closing bell.
The AUDUSD has continued to push higher overnight on the back of China’s trade data with the pair touching a high of .9134 before easing into the close. While there is a possibility we may see some selling today, particularly if the RBA are more dovish than what the markets expect, given current speculative positioning and a relatively-large gap between major US economic data and FOMC speakers, something that brings tapering fears back to the fore, it seems likely that the pair will continue to push higher today, particularly if the Chinese data beats yet again. Support starts at .9100, .9080 and .9050 with resistance kicking in at .9134 and again at .9180.
Data releases this evening include wholesale inventories and sales from the States, unemployment and housing starts in Canada, trade and the leading index from the UK, trade and CPI in Italy, industrial output and investment in France along with Greek industrial production.
David Scutt is on Twitter.
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