RBA meeting today
With the Independence Day holiday in the US and a somewhat quiet day in Europe and the UK, attention turns to the Australia.
Later today, Australia’s central bank, the RBA, meets to decide its interest rates. As of late, these meetings have erred on the side of caution and rates have remained on hold. However, there have been some individuals outside of the central bank calling for a ‘normalisation’ of interest rates, which means tightening interest rates over the medium term. It is a delicate balancing act for the RBA as interest rates are at historic lows, but wage growth remains virtually non-existent. Wage growth is significant when considering monetary policy because a lift in interest rates will mean things cost more. Therefore, if wage growth remains stagnant, raising rates could make people poorer and in some circumstances, effectively push people below the poverty line.
Elsewhere around the world, Japan is releasing BoJ Core CPI data, the UK is publishing Construction PMI figures, Europe is reporting Spanish Unemployment Change and PPI data. Finally, Canada is announcing Manufacturing PMI data.