RBA Minutes, UK Labour Data And Powell’s Speech

RBA

During the early hours of the Asian morning, we have received the RBA meeting minutes from the latest monetary policy meeting. At that gathering, the RBA confirmed that it will continue buying bonds, beyond September, although at a slower pace, while officials confirmed that interest rates are likely to stay at present levels at least until 2024. Also, according to the central bank, it believes that Australia’s GDP will decline in Q3, due to the lockdown measures, which are currently imposed. That said, the RBA believes that the Australian economy could grow by 4% in 2022 and by around 2% in 2023.

UK Labour Numbers

During the early hours of the European morning today we have received UK labour-related data for the recent months. The initial expectation for the average earnings including and excluding bonuses was for larger numbers than the previous ones. In reality, the excluding bonuses figure showed up exactly as forecasted, at +7.4%, but the average earnings including bonuses was greater than the forecast, coming out at +8.8%. This could result in further inflation increases, as real wages increase, the CPI may adjust accordingly in the near term as well. The BoE’s current inflation target sits at 2.0%. Some investors are starting to worry about the inflation rate rising way too quickly and that the Monetary Policy Committee would have to adjust their policy earlier. However, during the last meeting, the BoE said that the current policy is appropriate. GBP did not react much to the news, however the pound pair was seen stronger against commodity-linked currencies, such AUD. NZD and CAD. But the British currency was on the lower side against safe havens, such as JPY, CHF and USD.

GBP/AUD — Technical Outlook

Overall, GBP/AUD continues to balance above a short-term tentative upside support line taken from the low of July 6th. This morning, the pair pushed further north, overcoming yesterday’s high, at 1.8930. For now, we will continue aiming higher.

US Data And Powell’s

Before the US opening bell, the US will deliver its retail sales figures for the month of July, both core and headline. Both readings are expected to have declined significantly, with the MoM core one going from the +1.3% to 0.1% and the MoM YoY figure going from positive +0.6% to a negative 0.2%. After the retail sales numbers, the US will deliver the industrial production data for July on a MoM and YoY basis. There is currently no expectation for the YoY one, but the MoM figure is expected to have improved by a bit, going from +0.4% to +0.5%.

USD/JPY — Technical Outlook

USD/JPY continues to drift lower, while trading below a short-term tentative downside resistance line taken from the high of August 11th. Recently, the pair is seen to be getting a hold-up near the 109.11 hurdle, which we will monitor carefully. In order to continue aiming lower, a drop below that hurdle is needed.

As For The Rest Of Today’s Events

From The US we will also get the manufacturing production number for July, which is expected to improve, going from -0.1% to +0.6%. The business inventories are also set to show up higher, going from +0.5% to +0.8% for the month of June.

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