What to watch (1/2)

We have already received German factory order this morning which came in stronger than expected. Core FI markets have moved lower again in Asian trading, as market participants continue to react to Friday's much stronger than expected US labour market data.

• The RBA rate decision is due overnight tonight with a 25bp hike widely expected. The focus is likely to be on any change in tone of the statement and indications of how the RBA's forecasts have changed. For the full MNI RBA Preview click here.
• German inflation will be the focus for Eurozone markets this week. There is a large spread in expectations for the number in the Bloomberg survey. The median estimate is 10.0%Y/Y with the average estimate of 9.8% with four analysts looking for a sub-9.0% number. We noted last week that the Eurozone flash HICP print implied a reading of 7.9%Y/Y to 8.6%Y/Y. So we will need a decent downside surprise to this week's German number for EZ HICP not to be revised downwards in the final reading. See the full analysis piece here.