The Bank of England decision and the speculation surrounding it will continue to dominate price action this week. The markets seem to have priced in a 25 basis point cut for this Thursday, with many economists also expecting some additional policy measures to be seen.

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mask Markets await Reserve Bank of Australia statement

02/ 08/ 2016

Markets await Reserve Bank of Australia statement

Daily update

Yesterday's markets

  • EUR Spanish Manufacturing PMI: 51.0
  • GBP Manufacturing PMI: 48.2
  • USD ISM Manufacturing PMI: 52.6
  • AUD Building Approvals m/m: -2.9%
  • AUD Trade Balance: -3.20B
  • NZD Inflation Expectations q/q: 1.7%

Yesterday explained

The Bank of England's decision and the speculation surrounding it will continue to dominate price action this week. The markets seem to have priced in a 25 basis point cut for this Thursday, with many economists also expecting some additional policy measures to be seen. Retail banks are also expected to start charging those that are depositing, adding further complications to the policy impact. The BoE rate decision and inflation report are both scheduled for release on 12pm Thursday. 

Yesterday’s economic calendar was jam packed with Manufacturing data from both the US and the UK. Firstly, UK Manufacturing PMI continued to contract. The disappointing figure registered at 48.2, its lowest level since early 2013. It was one of the first high tier data releases that illustrated the effects of Brexit. In the afternoon, US ISM Manufacturing PMI was released. The figure showed Manufacturing in the States continued to expand at 52.6, but the reading was lower than expected at 53.2.

 

Today's markets

  • AUD Cash Rate
  • AUD RBA Rate Statement
  • EUR Spanish Unemployment Change
  • GBP Construction PMI
  • USD Core PCE Price Index m/m
  • USD Personal Spending m/m
  • NZD GDT Price Index

Today's focus

Further UK data will be under the microscope today, as Construction PMI is released this morning. The gauge is forecast to decline further into contraction territory at 44.2 falling from the 46.0 reading seen last month. Also today, the Reserve Bank of Australia will be releasing their latest statement and cash rate, with the RBA expected to cut their interest rates from 1.75% down to 1.5%. If this is actioned, the Aussie Dollar could depreciate.