Not a lot in either, but both ticking a little better. The big wait is on, Aussie Q2 CPI due at 0130GMT.
I've posted a good few previews already:
- Economic data due from Asia today - Aussie Q2 CPI the big one
- Australia: "RBA meeting is "live" & contingent on Wednesday's CPI outcome"
- Australian CPI coming up this week
If that's all a bit TL;DR, here is the short version:
- The market is expecting an RBA rate cut at the nexty meeting (August 2)
- But today's CPI data is hugely important for those expectations
- If the CPI surprises to the upside then expectations for a cut will get slashed. The AUD will get marked higher further immediately.
- On the other hand, if the CPI comes in low, then expectations for a cut will extend. There has a been a huge run on shorts in the past 24 hours, so the AUD will drop on a low CPI.
There are 3 CPI readings, headline, trimmed mean and weighted median. It's the headline and trimmed mean that are the most focus. There is scope for one to be high and the other low, and vice versa. So market response can (I reckon it will) be very volatile. 'Scenarios' can be sketched out until the cows come home, and I'm all for plans. But you know what they say,about plans and getting punched in the face. Take extra care today.
ps. This is the short version .... there are complicating factors (eg. headline inflation is expected to rebound on fuel and food prices, but the core reading, not.
