RBA decision looms for Australia

February 7, 2017

A busier day as far as markets are concerned, as we look locally for some important news.

The Reserve Bank of Australia (RBA) convenes to announce its decision on interest rates. While there hasn’t been much talk of changing rates, we have seen some underwhelming figures released lately regarding the state of the economy. If interest rates are kept on hold, it may be prudent to pay close attention to what is said in the RBA Rate Statement and what the Reserve Bank Governor has to say. These are important indicators as to the RBA’s thinking and the direction they see monetary policy going in the future. They key for traders when it comes to central bank decisions isn’t just the actual decisions being made at the time, but also thee outlook for monetary policy in the future. Central bankers have a swathe of data at their disposal and can better predict economic trends in the future.

As far as other economic announcements go, the US once again dominate the headlines.

In the early hours of tomorrow morning, the US is releasing a few pieces of data. This includes: JOLTS Job Openings, IBD/TIPP Economic Optimism, Trade Balance and Consumer Credit. The Jobs Openings data is important as it reflects the number of new job openings compared to the previous month. This can give an indication of a growing economy. As businesses grow, they need to hire more staff. The Economic Optimism data is just that. It reflects consumer sentiment and confidence in the economy. Consumer Credit data reflects the change in the total value of outstanding consumer credit that requires installment payments. This can indicate a growing economy as consumers/businesses borrow money to spend on products and expand operations. The Trade Balance data shows the difference in value between imports and exports compared to the previous month.

Elsewhere around the world, Europe is releasing Swiss SECO Consumer Climate, German Industrial Production, French Government Budget Balance, French Trade Balance and Swiss Foreign Currency Reserves. Finally, Japan is publishing Leading Indicator figures and the UK is reporting Halifax HPI data.