RBA & Forecasts Focus Of The Week

The focus of the week is going to be the RBA’s meeting on August 1, which looks like being “finely balanced” again with consensus expecting a hike but economists are divided and the market only has around a 25% chance priced in. There will also be a forecast update with the details published in Friday’s Statement on Monetary Policy.

• 14/25 economists surveyed by Bloomberg are expecting the RBA to hike 25bp to 4.35% on Tuesday. Some indication of where forecasts are will be given in the meeting statement but the details will be provided on Friday.
• On Monday the Melbourne Institute’s inflation gauge for July prints. It was 5.7% last month and while it hasn’t moderated as much as the CPI, it hadn’t risen as much either.
• RBA’s private credit series also print on Monday and total credit is expected to rise 0.4% m/m again.
• Tuesday sees housing-related data released starting with CoreLogic’s house prices for July which has posted four straight rises due to increased demand and supply shortages. Housing finance and building approvals for June also print and are expected to rise 1.5% m/m and fall 8% m/m respectively.
• The final Judo Bank manufacturing PMI is out on Tuesday and composite/services on Thursday. All three were below 50 in the preliminary estimates.
• Q2 retail sales volumes are published on Thursday and given that inflation rose more than nominal sales in the quarter, they are forecast to fall 0.5% q/q.
• The trade balance is also on Thursday and is projected to narrow slightly to $10.8bn from $11.8bn.