Tonight, the Reserve Bank of Australia published its minutes – from meeting which took place on August 5. The main message is further macroeconomic outlooks uncertainty and conviction that interest rates will be maintained at the current level for some time. RBA monetary policy committee acts much like FED and BoE, which have recently included the term “stagnation in the labor market” to their forward guidance.
Today a very important data from the UK – inflation readings. We should focus mainly on consumer price index (CPI), producer price index (PPI), house price index (HPI) and retail price index (RPI). According to the latest MPC guidelines, weak wage growth will likely keep inflation below the target (2.0%). Question may arise here – did MPC take into account the source of the problem with the wages growth? Which probably is connected with hundreds of thousands of immigrant from southern and eastern EU countries, who come to the UK looking for work.
We have two important readings coming from the other side of the pool today:
1. CPI – after strong reading in the second quarter forecast is currently at 0.1% after weak publications of another inflation data – including PPI, prices of imported goods, PCE and retail sales.
2. Building permits and housing starts – after good data from the construction in the Q2, investors can hope for further improvement and exit from the 2008 lows.
