Focus of yesterday's session was on RBA interest rate decision and the following statement. The Reserve Bank of Australia held its cash rate at a record low 2% Tuesday as expected on Tuesday, signalling scope for easier policy if future economic data warrants such a move. In a statement, the RBA said the Australian economy was getting better. “The expansion in the non-mining parts of the economy strengthened during 2015… Surveys of business conditions moved to above average levels, employment growth picked up and the unemployment rate declined in the second half of the year, even though measured GDP growth was below average.”
The Australian dollar, which the RBA said last year was overvalued, “has continued its adjustment to the evolving economic outlook.” RBA governor Glenn Stevens took note of solid domestic economic momentum despite recent global financial market volatility. "
New information should allow the Board to judge whether the recent improvement in labor market conditions is continuing and whether the recent financial turbulence portends weaker global and domestic demand," he said in a statement after the RBA's monthly board meeting.
Focus of tomorrow's session will be on Building Approvals and Trade Balance figures. Analysts are predicting 4.8% increase in Building Approvals and Trade Balance deficit should narrow to $2.45 billion. In the US session ADP job data and ISM Non-Manufacturing PMI figures will be published. ADP's data should show incline by 193,000, while Non-Manufacturing PMI should remain unchanged.
Figures to watch:
Building Approvals (Wednesday 1:30)
Trade Balance (Wednesday 1:30)
ADP Non-Farm Employment Change (Wednesday 14:15)
ISM Non-Manufacturing PMI (Wednesday 16:00)
