FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the key events on the day ahead.
"With markets pricing a 55% chance of an RBA cash rate cut by year-end and no major local data this week, there will be plenty of interest in the minutes from the RBA Board’s July meeting (11:30am Syd/9:30am Sing/HK). The statement a fortnight ago was barely changed from June but this does not preclude some new dovish language, as seen in the June minutes. Westpac's view remains no change in rates until a hike in Aug 2015."
"There is little or no tension over the outcome of the Bank of Japan meeting, expected any time after 11:30am Tokyo. There is only slightly more interest in the press conference by Governor Kuroda at 3:30pm local time, where he should sound content with the progress of the economy and inflation. Singapore releases May retail sales, a reminder of just how provisional the Q2 GDP estimate yesterday was. We are still waiting for China’s June loans and FX reserves data, with today listed as the final day of the release range."
"In the UK we will see June CPI, expected to still not be providing reason to bring forward rate hike plans, -0.1% m/m, 1.6% y/y. A year ago CPI was 2.9% y/y. Worth noting for EUR is the July ZEW reading on German investor sentiment, seen nearly steady at 67.4 current situation, 28.2 on expectations."
"A crowded US calendar kicks off with notable data: the July NY Fed Empire State manufacturing index and June retail sales. Consensus is for strong headline readings on both: +17 on Empire (though down a little m/m) and 0.6% on total retail sales, 0.5% ex-autos and gas, picking up from 0.3% and 0% respectively in May. Earnings reports include JP Morgan, Goldman Sachs and Intel."
"Fed Chair Yellen’s semi-annual testimony begins at 10am NY to a Senate committee. The Fed’s latest growth forecast for 2014 of 2.2% is unlikely to be met given the base effect of the Q1 contraction. But the main pressure on Yellen from the politicians will be from Republicans alleging that the Fed is taking risks with inflation and encouraging financial excesses by running loose monetary policy for too long. There will be a huge number of headlines over the day but our sense is that Yellen will push back on the criticism enough to leave USD somewhat weaker."