It’s going to be a massive week ahead for Australian economic data, kicking off on Thursday with the release of the country’s business capital expenditure report.
That will be followed next week by building approvals, retail sales, international trade, house price data, several PMI reports and a stack of partial GDP indicators ahead of Australia’s actual GDP release on Wednesday.
On top of that markets will also receive a whole raft of economic data from abroad, including the latest US jobs report.
Despite the risks heading into such a massive data deluge, financial markets still see very little risk that the Reserve Bank of Australia (RBA) will be lifting interest rates anytime soon.
This chart from Westpac shows the evolution in Australian cash rate expectations over the past year.
“Early this year markets were fully priced for a hike by December 2018, but after the muted Q4 CPI report and give recent RBA commentary it is now back to about a 50% chance,” Westpac says.
“We see no reason to change our view that the cash rate will remain on hold in 2018 and 2019.”
And its not just financial markets who think there’s less chance the RBA will be lifting interest rates within six months time.
It now sees only one hike arriving in November, and admits the risks are that the RBA won’t lift interest rates at all this year.