Reserve Bank of Australia keeps interest rates on hold at 1.5 percent

Daily update

Yesterday’s markets

• AUD RBA Interest Rate Statement and Interest Rate Decision
• GBP PMI Construction from UK
• EUR Producer Price Index

Yesterday’s explained

Even though the report for the TD Securities Inflation reports from Australia came positive, it wasn’t enough of a positive shift to cause the RBA to decide on a rate hike and thus remained at its current state with no changes taking place for the interest rate causing AUD/AED to decrease in currency strength.

PMI Construction reports from UK came out positive shifting from 49 to 52.3 which exceeded expectation, however the market participants such as investors were still reacting to the announcement made by Theresa May stating that she will invoke Article 50 which would commence the BREXIT and consequently that casued the GBP/AED to plunge to an all new low 4.707 that was last seen in 1985.

Finally, the day concluded with the Producer Price Index coming in for the EU Zone which was forecasted to decline from 0.3% to 0.1%, however it declined more than expected and plummeted to -0.2% which caused the EUR/AED to decline as a result.

Today’s markets

• AUD Retail Sales
• AUD RBA Assistant Governor Speech
• USD ADP Employment Change
• USD Trade Balance
• USD Markit Services PMI
• USD Factory Orders

Today’s focus

Day starts with Retail Sales reports from Australia which basically is a survey of goods sold based on sampling of retail stores of different types and sizes which would indicate the pace of the Australian economy followed by a speech from the Assistant Governor of the RBA Christopher Kent.

From the EU Zone would be releasing the Markit Service PMI’s which acts as an indicator of the economic situation in the Euro Zone as a whole by analyzing the conditions of the sales numbers as well as employment numbers in the service sector.

The rest of the day will be flooded with mid-tier reports from the U.S. Starting off the chain is the ADP employment change which is used to measure the change in the no. of people that are employed which translates to the consumer spending pattern depending on the overall results. Next in line is the Trade Balance that shows the balance between the imports and exports. A positive shift would mean that there is a trade surplus and negative indicating that they are facing a trade deficit. Markit Service PMI’s will be released short after which shows the business conditions of the service sector. Finally we would be facing the factory order that is the total of durable and non-durable goods produced which gives understanding to the US’s inflation and growth in the manufacturing sector.