Focus of yesterday's session was on RBA Meeting Minutes. Australia’s central bank said record-low interest rates are underpinning consumer spending and house building while a lower currency is improving firms’ competitiveness. “Members noted that recent domestic data had, on balance, been positive and judged that there were reasonable prospects for growth to increase gradually over the forecast period,” the Reserve Bank of Australia said Tuesday in minutes of its Feb. 2 policy meeting when rates were left unchanged at 2 percent.
It reiterated the approach set out in recent communication that it will monitor whether strong jobs growth is sustained and whether recent global market turmoil affects the domestic economy. It also repeated that contained
inflation provided further scope to ease should that be needed. “Over the period ahead, new information would enable the board to assess whether the recent improvement in labor market conditions was continuing and whether recent financial market turbulence presaged weaker global and domestic demand,” it said. “
The board noted that the outlook for continued low inflation may provide scope for easier monetary policy, should that be appropriate to lend further support to demand.”
In the US session Empire State Manufacturing Index data was published. The February 2016 Empire State Manufacturing Survey indicates that business activity continued to decline for New York manufacturers. The headline general business conditions index edged up three points, but remained firmly in negative territory at -16.6. Analysts were anticipating increase to -10.3. The new orders and shipments indexes indicated an ongoing decline in both orders and shipments.
There will be no data releases from Australia tomorrow. In the US session Building Permits, Housing Starts, PPI and Industrial Production data will be published, as well as FOMC Meeting Minutes. Building Permits and Housing Starts should remain relatively unchanged, PPI is expected to decline by 0.2%. On the other hand, analysts forecast 0.3% increase in Industrial Production. FOMC Meeting Minutes should add additional volatility by the end of the session.
Figures to watch:
Building Permits/Housing Starts (Wednesday 14:30)
PPI (Wednesday 14:30)
Industrial Production (Wednesday 15:15)
FOMC Meeting Minutes (Wednesday 20:00)
