19 May 2015
RBA minutes, RBNZ inflation exp in focus - Westpac
FXStreet (Bali) - According to Sean Callow, FX Strategist at Westpac, there are risks of a dovish tone in the RBA minutes, with key focus on the language used.
Key Quotes
"The RBA minutes will be released at 11:30am Syd/9:30am Sing/HK. We see risks of a dovish tone, with the key focus on the language used. While the RBA cut rates in May, there was no guidance in the statement. A more balanced signal was used in the quarterly Statement on Monetary Policy: “The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time”. We also saw a mild easing bias from the downgrade in the inflation forecast."
"The RBNZ inflation expectations survey for Q2 will be released at 1pm Syd/11am Sing/HK. 2 year inflation expectations have been collapsing since mid-2014, and a decline is a condition the RBNZ cited for rate cuts. Q1’s headline number was 1.8% y/y. We also see the results of the dairy auction in the Lon/NY session, which will be closely watched given Fonterra’s recent reduction in forecast supply."
"The Asian calendar is limited to the Bank Indonesia policy decision. Most forecasters are expecting rates on hold at 7.5%, though there are a few calls for a cut."
"UK headline CPI is expected to print flat again y/y. BoE governor Carney said last week that while inflation might dip below zero near term, it would be temporary. The market consensus for core inflation is for it to remain at 1.0%y/y. We also see the Germany May ZEW survey of analyst expectations and final Eurozone Apr CPI."
"US Apr housing starts are expected to rise 9.6%m/m. We were looking for single family starts to drive a bounce back in Apr, though the slip in the NAHB index was largely due to single family sales, suggesting downside risk. Apr building permits are expected to rise 2.1%m/m after a 5.7% fall in Mar."
Key Quotes
"The RBA minutes will be released at 11:30am Syd/9:30am Sing/HK. We see risks of a dovish tone, with the key focus on the language used. While the RBA cut rates in May, there was no guidance in the statement. A more balanced signal was used in the quarterly Statement on Monetary Policy: “The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time”. We also saw a mild easing bias from the downgrade in the inflation forecast."
"The RBNZ inflation expectations survey for Q2 will be released at 1pm Syd/11am Sing/HK. 2 year inflation expectations have been collapsing since mid-2014, and a decline is a condition the RBNZ cited for rate cuts. Q1’s headline number was 1.8% y/y. We also see the results of the dairy auction in the Lon/NY session, which will be closely watched given Fonterra’s recent reduction in forecast supply."
"The Asian calendar is limited to the Bank Indonesia policy decision. Most forecasters are expecting rates on hold at 7.5%, though there are a few calls for a cut."
"UK headline CPI is expected to print flat again y/y. BoE governor Carney said last week that while inflation might dip below zero near term, it would be temporary. The market consensus for core inflation is for it to remain at 1.0%y/y. We also see the Germany May ZEW survey of analyst expectations and final Eurozone Apr CPI."
"US Apr housing starts are expected to rise 9.6%m/m. We were looking for single family starts to drive a bounce back in Apr, though the slip in the NAHB index was largely due to single family sales, suggesting downside risk. Apr building permits are expected to rise 2.1%m/m after a 5.7% fall in Mar."