FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, notes that Westpac is looking for a slightly above-consensus CPI reading out of Australia today.

Key Quotes

"Much rests on Australia’s Q2 CPI data (11:30am Syd/9:30am Sing/HK), with markets pricing an aggressive -12bp from the RBA cash rate by Dec, -16bp by Mar 2015. Westpac is looking for a slightly above-consensus reading, headline 0.6% q/q, 3.2% y/y (median 0.5, 3.0) and an average of 0.7% q/q, 2.8% y/y on the core measures (median 0.6-0.7, 2.7). The 2.8% y/y on core we expect should sum up the RBA’s outlook – after the shock 0.9% surge in Q4 was followed by a muted 0.5% in Q1, inflation is causing no alarm but is still in the top half of the target band. A reading around our expectations should cause pricing for a rate cut to be reduced but by no means eliminated and boost AUD/USD perhaps 25-30 pips."

"Asia’s data calendar is limited to Singapore Jun CPI and Taiwan Jun industrial production. In the UK there will be close attention on the minutes from the BoE MPC’s July meeting for any hints on the first rate hike. Canada releases May retail sales but the US calendar is quiet."

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