Aug 07 – Economic Events Outlook – RBA Leaves the Cash Rates on Hold
Arslan Butt • 2 min read
What’s up, traders.
The Asian session was relatively light as the investors were focusing on the RBA cash rate and policy statement. The cash rate of 1.50% didn’t place much influence on the market as it was widely anticipated. For now, the Halifax HPI from the United Kingdom and Ivey PMI from Canada remain on the cards. Are you for it?
Watchlist – Key Economic Events
RBA Cash Rate & Rate Statement – AUD
The Reserve Bank of Australia left the rate unchanged at 1.50%. The RBA last cut the cash rate to its record low of 1.5% back in August 2016, after an earlier cut to 1.75% in May. There has not been an official cash rate hike since November 2010.
As per the RBA statement, growth in China has slightly stalled, with the government easing policy while continuing to pay close heed to the risks in the financial sector.
Overall, the inflation remains weak, although it has risen in some economies and further improvements are expected given the tight labour markets. The RBA is also aware of the uncertainty driven by the trade war between China and the US, as China is a major trading partner of Australia and does impact its economy.
Halifax HPI m/m – GBP
The indicator will be released at 8:30 (GMT) by the Halifax Bank of Scotland with a forecast of 0.2% vs. 0.3%. It’s a leading indicator of the housing industry health because rising house prices attract investors and spur industry activity.
If the Halifax HPI is greater than forecast and the previous figure, it strengthens the currency. But in the given scenario, it’s likely to keep the Sterling under pressure.
Ivey PMI – CAD
It’s a survey of about 175 purchasing managers, selected geographically and by sector of activity to match the economy as a whole, which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
The economic event will be followed at 15:00 (GMT). The Purchasing Managers’ Index is expected to rise to 64.2 from 63.1.