Australia takes center stage as the RBA prepares to release its Rate Statement and Cash Rate which is expected to cut to 1.5% from 1.75%. The cut is widely expected and should the bank cut the rate to 1.5%, we would see a mild sell off in the AUD as the new data is fully priced in. If the RBA cuts the rate by more than the expected 0.25%, we would see the AUD tank considerably more, and on the flip side, should the bank not cut rates, we would see the AUD rocket north as we see carry trades pouring in. The Rate Statement will also be of great importance as markets look it to decipher the Banks view on the current and future outlook of the Australian economy. A more hawkish statement will see the AUD respond positively while a dovish tone will see the AUD react negatively.

Today’s key economic data is as follows:

EUR

  • Spanish Manufacturing PMI expected at 51.6

GBP

  • Manufacturing PMI expected at 49.1

USD

  • ISM Manufacturing PMI expected at 53.1

AUD

  • Building Approvals m/m expected at 0.9%
  • Trade Balance expected at -2B
  • Cash Rate expected at 1.5%
  • RBA Rate Statement

NZD

  • Inflation Expectations q/q previously at 1.6%