FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the day ahead, outlining the Australian building approvals as the key event in the Asian session.

Key Quotes

"Australia’s only notable data releases for the week are due at 11:30am Syd/9:30am Sing/HK, though they are not game-changers. We will see June building approvals, June private sector credit and Q2 import and export prices i.e. an update on Australia’s terms of trade."

"Building approvals are frequently volatile month to month, partly due to the impact of approvals of apartment blocks or other large developments. Big picture, approvals are at historically healthy levels, giving policymakers firm reason to expect strong growth in construction activity and employment in the year ahead. Approvals in January reached 17 772, narrowly higher than the cycle peaks of 2002 and 1994. This wave of approvals is now starting to ebb. We look for -4% in June, after a 9.9% bounce in May, but consensus is flat. Private credit should tick up another 0.4% m/m while we expect the fall in export prices in Q2 (-8%) to exceed the decline in import prices (-3%)."

"In Asia the highlights are the Philippines CB decision and Q2 Taiwan GDP. Most forecasters expect a 25bp hike to 3.75% at the BSP but several look for no change, so PHP should be lively."

"The ‘flash’ July reading on Eurozone CPI will be closely watched ahead of next week’s ECB meeting. Consensus is for inflation to hold at an unacceptably low 0.5% y/y, with some risk of a 0.4% surprise. Germany’s July unemployment data is also due. In the US, there is a comparative lull, with July Chicago PMI, weekly jobless claims and Q2 employment costs overshadowed by July NFP and ISM Friday. Canada releases May GDP (f/c 2.3% y/y), which could pose further risk for vulnerable CAD."

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