24 Jul 2013
Flash: Australia’s key weekly data risk squeezed into 15m - Westpac
FXstreet.com (Barcelona) - As Sean Callow, FX Strategist at Westpac, notes, "Australia’s key data risk for the whole week is squeezed into a 15 minute window today", when we see Australia Q2 CPI at 1.30 GMT and China's HSBC PMI at 1.45 GMT.
Key quotes
"Westpac’s forecast of 0.5% q/q, 2.5% y/y is based on the usual seasonal softness in electricity and pharmaceuticals. But just as critical is the fall in fuel prices (albeit now being reversed as weaker AUD feeds through) and a moderation in new dwelling price inflation which are partly offsetting the seasonally unusual rise in fruit & vegetables."
"A core reading of 0.4% or lower should see a slight increase in pricing for an Aug RBA cut, but at 63%, there is already plenty priced in. A 0.6% print could help AUD/USD push towards 0.9325/30 but a rate cut would most likely still be >50% priced. Only say 0.7% on core inflation would really shake the market’s conviction."
"China’s manufacturing PMI from Markit/HSBC, the median forecast is for no change at 48.2 but with a range of 47.5 to 49.0. Any number in this range of course would imply contraction in this sample of businesses skewed towards exporters, whose outlook officials have described as “grim”. Any notable bounce would be quite surprising. There is always scope for a headline some way from consensus, given this is not a report ‘guided’ by official comment."
Key quotes
"Westpac’s forecast of 0.5% q/q, 2.5% y/y is based on the usual seasonal softness in electricity and pharmaceuticals. But just as critical is the fall in fuel prices (albeit now being reversed as weaker AUD feeds through) and a moderation in new dwelling price inflation which are partly offsetting the seasonally unusual rise in fruit & vegetables."
"A core reading of 0.4% or lower should see a slight increase in pricing for an Aug RBA cut, but at 63%, there is already plenty priced in. A 0.6% print could help AUD/USD push towards 0.9325/30 but a rate cut would most likely still be >50% priced. Only say 0.7% on core inflation would really shake the market’s conviction."
"China’s manufacturing PMI from Markit/HSBC, the median forecast is for no change at 48.2 but with a range of 47.5 to 49.0. Any number in this range of course would imply contraction in this sample of businesses skewed towards exporters, whose outlook officials have described as “grim”. Any notable bounce would be quite surprising. There is always scope for a headline some way from consensus, given this is not a report ‘guided’ by official comment."