Focus of the session was on RBA interest rate decision and the following statement. At its meeting RBA decided to leave the cash rate unchanged at 1.50 per cent. In Australia, recent data suggest that overall growth is continuing, despite a very large decline in business investment, helped by growth in other areas of domestic demand and exports. Labour market indicators continue to be somewhat mixed, but suggest continued expansion in employment in the near term.

Inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time. Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.

Wednesday's session brought Australian GDP figure. The Australian economy expanded at a slower but solid pace in the second quarter, as firm consumer spending and trade continued to support growth. Gross domestic product (GDP) expanded at a seasonally adjusted 0.5% in the second quarter, the Australian Bureau of Statistics reported Wednesday. Compared to a year ago, the economy expanded 3.3%. A median estimate of economists called for a 0.6% increase. The economy grew 1.1% in the first quarter, the biggest quarterly increase in three years.

On Thursday Australian Trade Balance figures were released. In trend terms, Australian balance on goods and services was a deficit of $2,485m in July 2016, an increase of $62m (3%) on the deficit in June 2016. In seasonally adjusted terms, the balance on goods and services was a deficit of $2,410m in July 2016, a decrease of $840m (26%) on the deficit in June 2016. In seasonally adjusted terms, goods and services credits rose $719m (3%) to $26,425m, while, goods and services debits fell $122m to $28,835m.

There were no data release from Australia on Friday, while from China CPI and PPI figures were released. Chinese consumer inflation weakened for the fourth consecutive month, while a smaller decline in producer prices raised expectations that overcapacity in the manufacturing sector was beginning to fade. The consumer price index (CPI) advanced 1.3% from a year ago, following a 1.8% increase in July, the National Bureau of Statistics reported Friday. A median estimate of economists forecast CPI inflation to weaken to 1.7% annually.

Compared to July, consumer prices rose 0.1%, following a 0.2% increase the prior month. Economists projected a 0.3% month-on-month increase. A separate gauge of factory-gate prices known as the producer price index (PPI) fell 0.8% in the 12 months through August, the smallest decline since 2012. Producer prices have been in deflation for four-and-a-half years, a painful reminder of China’s protracted manufacturing slowdown. The July data released last month, which showed a 1.7% annualized drop in PPI, offered some solace that deflationary pressures were finally beginning to fade. However, analysts have warned that China’s manufacturing sector will continue to suffer from overcapacity over the medium-term.

This week markets will be looking at:

NAB Business Confidence (Tuesday 3:30)

China's Industrial Production (Tuesday 4:00)

 Employment Change/Unemployment Rate (Thursday 3:30)