AU Data
- Wednesday 1.30pm Trade Balance for January previous -$1.336bn
- Wednesday 11.30am RBA Cash Rate Announcement
- Thursday 1.30pm GDP for Q4 previous 2.2% y/y
Last week saw the current account deficit widen beyond expectations to $15.09bn, however this was offset by retail sales coming in strong at +0.9%. This week the market will focus on Wednesday's RBA cash rate decision where it expects rates to be left on hold at 6.25%. The market will also focus on the trade balance after last week's disappointing current account deficit and Thursday's GDP number for further evidence of slowing economic growth.
NZ Data
- Thursday 9.00am RBNZ Interest Rate Announcement
There was little data out of New Zealand last week with the principle highlight being the trade deficit widneing to $833m. Despite the relative lack of Data the NZD was a victim of wide spread risk aversion following Tuesday's stock market crash in China, as investors liquidated carry trades by selling the high yielding currencies. This week the market will focus on the RBNZ interest rate announcement where the market expects a 25bps hike to 7.50% and will pay close attention to the accompanying statement to see whether Governor Bollard leaves the door open for further tightening.
US Data
- Tuesday 4.00am ISM Non-Manufacturing Survey for February previous 59.0
- Thursday 9.00am Consumer Credit for January previous $6.0bn
- Saturday 2.30am Average Earnings for February previous 0.2% m/m
- Saturday 2.30am Trade Balance for January previous - $61.8bn
- Saturday 2.30am Non-Farm Payrolls for February previous 111k
- Saturday 2.30am Unemployment for February previous 4.6%
Last week saw generally soft data from the US with durable goods plummeting by 7.8% its worst figure in 3 months, GDP dropping to 2.2% and New Home sales falling to 0.937m. However manufacturing ISM was significantly better than expectations and importantly back above 50.0 coming in at 52.3. This week sees a plethora of data with consumer credit and average earnings being watched closely for their inflationary implications and Saturday's trade balance as the deficit shows few signs of narrowing. Saturday's employment report will also be closely scrutinised for any signs of weakness in the labour market that might warrant monetary loosening.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
6.25% |
+25bps |
08/11/06 |
8th Mar |
| NZ (RBNZ) |
7.25% |
+25bps |
08/12/05 |
8th Mar |
| US (FED) |
5.25% |
+25bps |
29/06/06 |
21st Mar |