The pace of data releases picks up this week but it’s unlikely to change expectations the RBA will stay on hold at the Feb meeting. Just one economist out of 21 expects the RBA to cut 25bps in Feb while money market is pricing 8bps cut or one-third chance of a 25bps cut. On Mon, TD Securities-MI releases monthly inflation figure for Dec. In November, the gauge fell 0.1%m/m but TD pointed that it is usually a weak month for price rises and a decent average seasonally pickup can be expected in Dec. Accordingly, there’s an expectation that the gauge will rise but it will interesting to see if y/y inflation remains within the mid-point of the RBA’s target band. Later Mon, there’s ANZ job ads survey for Dec which fell for 8 straight months until Nov. Another weak number is expected, so any rise would be a positive surprise for the market. There’s also housing finance published by ABS for Nov where expectation is for a small drop from +0.1% rise in Oct.
On Wed, Westpac-MI’s Jan consumer sentiment index may rise from 100.0 in Dec because of factors that are likely to have a positive influence on sentiment like rise in share market, last-minute deal to avert fiscal cliff in the U.S. and generally upbeat stories about prospects for economy amid rising iron ore prices. On Thu, it’s Labor Force Survey where expectation is for around 3,000 rise to employed persons vs +13,900 in Nov, but unemployment rate is expected to rise to 5.4% from 5.2% and participation rate flat at 65.1%. Data release from the RBA includes forex transactions for Dec due on Thu. The data will indicate if the RBA’s outright sale of aussie (and not covering them by buying in the market) to customers including foreign central banks has faded further. It’s inflation week in New Zealand with the release of Q4 Consumer Price Index on Friday. Expectation is for a flat q/q and +1.2% y/y compared with +0.3%/+0.8% in Q3. Other releases prior to that include electronic card transactions for December due on Monday and food price index for December due on Tuesday (the latter will give some insight into Q4 CPI data). No speech or data is due from the RBNZ.
EasyForexNews Research Team