The financial week truly begins on Tuesday with the first key piece of data coming in the form of Australian Monetary policy meeting which will no doubt touch on recent data from Australian economy including the weak employment change and Unemployment rate which shaded expectations due to recent Government infrastructure investment. Typically, markets will react accordingly to comments from the Reserve bank of Australia’s especially if they voice any opinions on how current policy is working.
Following Australia’s monetary policy minutes, the nation releases its House price index figure which are expected to reach 3.1%, the last House price index registered -0.2% therefore the index would have to have improved dramatically.
In the afternoon the US releases its monthly building permits figure which is projected to reach 1.17M. It’s worth noting that it hasn’t missed or surpassed expectation in the last 4 months. A number less than the expected level could demonstrate caution in the housing market potentially due to the upcoming presidential election.
Focus late afternoon on Tuesday turns to Canada with the Bank of Canada’s Stephen Poloz speaking. He is anticipated to touch on Canada’s sluggish economy, future prospects for the nation and cutting Canada’s reliance on China.
Wednesday morning sees Japans Monetary policy statement which is followed Bank of Japans press conference. It is predicted they will in essence push back their objective of reaching an inflation target of 2%. Markets expect the BOJ to continue with asset purchasing and this could potentially see Yen strengthen.
Wednesday afternoon is dominated by key data releases from the US. These include Crude oil inventories, FOMC Economic projections, FOMC statement, FED interest rates, and the FOMC press conference to resume. Yellen will take the chair at roughly 18.00 GMT and is expected to cover the US’s buoyant labour. However; a rate hike from 0.50% isn’t truly expected until the end of the year partly due to the upcoming presidential battler but also due to some patchy wage data and slow growth in the last quarter. Markets will also listen keenly to the FOMC’s Economic projections whereby the FED will outlay growth predictions, inflation forecasts and employment initiative for the next 2 years.
There are two final data releases on Wednesday evening both coming from New Zealand. They comprise of the New Zealand Interest rate decision which is expected to remain at 2.0%. Markets envisage a more likely cut happening in November as the Reserve bank attempts to steady inflation. More interesting will be the comments offered after the decision which may elude to a precise.
Thursday has key economic data from the US and Europe.
Firstly, we begin with US unemployment claims which have been steady over the last 7 months and the last time the target was missed was on the 28th July and speared to be a blip. The number of individuals anticipated to be claiming unemployment benefit is 261K a thousand more than last week. However, this could be shaded slightly, any dramatic reduction would provide further argument for rate rise and push dollar strength.
Later on Mario Draghi speaks at the European Systemic Risk Board based in Frankfurt. Mario typically provides Euro volatility and was recently criticized by lack of further action and stimulus. The current stimulus scheme finishes in March and many believe the ECB could be running out of options to induce growth.
Friday sees Canadas Core CPI release; The inflation number is forecast at 0.2% and could well to hit its projection but it has to be worth bearing in mind Canadas inflationary issues and the number potentially has scope to come in flat. The last two readings have also been 0.0%.