Tuesday’s RBA Minutes & Thursday’s Jobs Report Focus Of Week

The focus of the week is likely to be on Tuesday’s RBA minutes, following the surprise May hike, and Thursday’s employment report, which will remain a key input into future RBA decisions given its talk of an unemployment recession in recently released documents (see Documents Show RBA Considered Impact Of 4.8% Rates).

• On Tuesday, the RBA minutes from the May meeting will be published and they will be dissected for the reason why the Board decided to hike 25bp rather than pause again as was expected.
• Westpac’s consumer sentiment survey for May is released on Tuesday too and is likely to be impacted by the surprise May hike after rising following the April pause. The budget is also expected to have an effect.
• The important Wage Price Index for Q1 prints on Wednesday. It is forecast to rise 0.9% q/q and 3.6% y/y after 0.8% and 3.3% in Q4. A significant upside surprise to the data would increase the chance of further tightening.
• Thursday sees the April employment report with new jobs expected to rise 25k after 53k last month. The unemployment rate should be steady at 3.5%.
• Melbourne Institute inflation expectations for May are also released on Thursday. News over the last few weeks is likely to put downward pressure on expectations (see Likely Downward Pressure On Inflation Expectations).