It’s a busy looking week in Asia with a couple of central bank announcements likely to be the big market movers.

The RBA and RBNZ meet this week and they are both looking at an easing bias. Unlike the RBA who is widely expected to leave rates on hold, the RBNZ is looking at a cut.

They surprised the market a few months ago with a cut on the back of a plummeting CPI print. That sluggish data coupled with a weak outlook have started to weigh on the Kiwi economy and the expectation is now for a 25bp cut. There is also the belief there will be another 25 bp cut around November with the odds sitting at about 80-90%.

As a result of these two key releases, both the AUD/USD and NZD/USD are weak. The Aussie is already testing below the 0.6800 level and is pressing lower. Although if the outlook is a bit brighter thanks to a better than expected CPI print, we could see some upside.

The Kiwi has been tumbling hard and closing in on the 0.6500 handle. A cut you would think would spell more weakness. However, the fact that the RBNZ has been more transparent and expectations are high for a cut, there could be upside risk here.

Key Data Points

Tomorrow we also get Kiwi employment data. The overall unemployment rate is under 5% which is a positive and is on the right path overall. Generally a market mover but maybe not ahead of the RBNZ.

The USD/JPY hasn’t been mentioned much, but we do see GDP released later in the week. Generally, the data doesn’t move the Yen much so we don’t always follow it as closely as the other pairs.

China will have a couple of key data points this week on the back of manufacturing PMI from last week. Today we’ll get services PMI. But we also have trade balance data due before getting CPI and PPI later in the week.

There was an uptick in the data last week, so we will be watching to see if that can continue, with the trade wars hanging over the countries head.