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What to Watch - Week of 12 August

After last week’s volatility, traders will be focused on the unemployment print locally, with all eyes on RBA Governor Michele Bullock and her testimony in front of the House Economics Committee on Friday. State side, it’s all about inflation again with both PPI & CPI hitting the wires. Europe is quiet, with Chinese activity data released on Thursday expected to show a subdued start to Q3.
NAB Markets Research
12 August 2024
Created by potrace 1.15, written by Peter Selinger 2001-2017 3 min read

Taylor Nugent | Markets Research

Past Week

  • A very volatile week for markets with last Friday’s two-tenth rise in the US unemployment rate stoking recession fears (4.3% vs. 4.1% consensus). A solid US ISM Services (51.4 vs. 51.0 consensus) and a fallback in Jobless Claims (233k from 250k) saw markets calm a little
  • The BoJ also came out to calm markets. The RBA meanwhile was slightly more hawkish in its hold decision, pushing back on market pricing for near term cuts

Comment

  • In this comment we highlight the RBA’s insights from their business liaison program where anecdotes continue to suggest services inflation remains too strong, while firms more orientated to the goods side of the economy have seen a significant easing in cost pressures
  • One aspect for inflation is the degree of restriction posed by financial conditions. The RBA noted “financial conditions for households remain restrictive but may be a little less restrictive than previously assessed”

Week ahead

  • Australian Employment (Thursday) and Wages (Tuesday) headline, with Consumer confidence and the NAB Business survey also out Tuesday.
  • From the RBA, Deputy governor Hauser speaks Monday, and Governor Bullock appears with colleagues in front of the House Economics Committee on Friday.
  • BNZ expect the RBNZ to cut rates on Wednesday, but the risk is they will hold fire and need to play catch up later. Analysts are split, 8 for a cut, 10 for a hold, while markets are 74% priced for a cut.
  • The US gets key inflation data in PPI (Tuesday) and CPI (Wednesday). Retail Sales (Thursday) will give an update on the consumer, while jobless claims (Thursday) will remain in heightened focus.
  • The European data calendar is quiet, while the UK gets employment & earnings (Tuesday), CPI (Wednesday) and GDP (Thursday).
  • Chinese activity data (Thursday) should show a subdued start to Q3. Japan has a holiday Monday.

View the full report here

Also in the What to Watch

 

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