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May 2017

Reserve Bank of Australia (RBA) minutes hold no surprises

Published: Tuesday 16 May 2017

  • Reserve Bank of Australia (RBA) minutes hold no surprises
  • German ZEW report is key for Euro today
  • UK Inflation and Retail data awaited for GBP
By David Johnson
Overnight, the Reserve Bank of Australia published the minutes from their last board meeting and there were few surprises. It was in line with their statement. The housing and labour markets are in focus, economic activity is expected to pick up and inflation is slowly rising. No news there, then, and the Aussie Dollar was largely unruffled.
This morning brings UK Inflation data and we are expecting a small uptick. This would be in line with the Bank of England’s (BoE) thinking, as shown in the minutes from their last meeting. However, their central target is 2.0% and we are expecting something between 2.5 and 2.7%. No need to panic, in other words, but it may turn up the volume on calls for the BoE to bring forward their next interest rate hike.
From the Eurozone, we will get confirmation of the final Q1 economic growth rate. A quarterly rise of 0.5% is almost inked into the books, so any variation on that would be influential.  For now, the Euro is strengthening. We have seen it gain ground against the Pound and USD amongst others. If this morning’s German ZEW Index is as positive as many predict, further EUR strength is a given.
This afternoon brings US construction data in the form of the building permits count. That is considered a bellwether for the US construction sector confidence and the forecasts are positive. We also get US industrial production. That is likely to show a small decline on last month’s very positive 0.5% growth. So, on balance, if all this data is as expected, the effect on the USD likely to be muted.
And many ‘news’ reporters are covering a story about a new trend amongst clubbers. Young women are apparently going out for the night wearing nothing but strategically placed duct tape.  My mother always warned me about women like that and I probably don’t go to the same sorts of clubs as them. I doubt they are into plane spotting and fly fishing but I was left wondering about the pain of getting ready for bed at the end of the night. Removing an Elastoplast is bad enough but a whole covering of duct tape…..ouch.


Interviewer: "Congratulations on winning the £120 million Euromillions lottery."
Farmer: "Thank you."
Interviewer: "Do you have any special plans for spending all of that money?"
Farmer: "Not really. I'm just gonna keep farming until the money runs out."  

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