There’s not a lot to report from last night. The Reserve Bank of Australia (RBA) left rates unchanged at 1.50%, as was widely expected. The central bank also maintained a neutral stance, keeping with the same line as previous meetings. The RBA also left the cash rate unchanged at 1.50%, again as anticipated. Their statement pointed out that year-ended Gross Domestic Product (GDP) growth is expected to have slowed in the March quarter, reflecting the quarter-to-quarter variation in the growth figures. Philip Lowe is still optimistic that "economic growth is still expected to increase gradually over the next couple of years to a little above three percent.”
The RBA also pointed out that the indicators for the labour market remain mixed. While there was stronger employment growth, the growth in total hours worked remains weak. And, as inflation will increase gradually, slow real wages growth will retrain growth in household consumption. Australia’s central bank is also conscious of the Australian housing market and pointed out that "growth in housing debt has outpaced the slow growth in household income.” The Aussie Dollar is largely trading higher off the back of this.
The US Dollar is higher this morning, reaching its highest since 26th
May, erasing overnight losses incurred earlier this morning following the terrorist attack in London at the weekend. A surge in Yen at the US Dollar’s expense, as an alternative “safe haven” currency, is seen as one of the culprits.
Markets are also getting more nervous ahead of former FBI director James Comey's testimony before the Senate Intelligence Committee on Thursday. Comey will certainly be asked about the investigation into Russian interference in the US presidential election last year and also about Trump's interference in the investigation on former national security advisor Michael Flynn's tie to Russia. All this is weighing the dollar down a bit, as well as it struggling to shrug off Friday’s weak Non-Farm data.
There isn’t a huge amount of data out today. Of course, with the UK general election looming and the recent terror attacks in London and Manchester, hard economic data isn’t needed to move the markets.
Some data highlights for today are, however, the US jobs openings results, the Canada Ivey Purchasing Managers’ Index – which covers all aspects of the Canadian economy and could move the Canadian Dollar – and European retail figures, also a good indicator of the strength of European economies. While the Eurozone Retail PMI fell from 52.7 in April to 52.0 in May, the figures still point to a moderate rise in monthly retail sales across the Eurozone. The latest Retail Sales figures show that the volume of retail trade in the euro area is up 0.1 percent for May, and 0.5 percent in the EU28, compared to April 2017. The highest increases recorded were for the UK (+2.8 percent), Finland (+2.0 percent), Portugal and Sweden (+1.5 percent).
I’m addicted to brake fluid, but I can stop whenever I want.
A baby seal walks into a club.
Have I told you this déjà vu joke before?
I was wondering, why a Frisbee appears larger the closer it gets… then it hit me.