The Q2 CPI report is due from Australia this morning (local time).
As posted earlier: 0130 GMT Q2 CPI:
Headline expected 0.7% q/q, prior 0.6%
- For the y/y expected 3.8%, prior 1.1%
Core inflation: Trimmed mean (RBA target band is 2-3%
expected 0. 5% q/q, prior 0.3%
expected 1.6% y/y, prior 1.1%
this here is an earlier preview post
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Also high on the watch list for the AUD are
1. The lockdown of Sydney is expected to be formally extended today, well into next month.
This comes as new cases continue to mount on a steadily increasing trend. The numbers for Saturday and Sunday showed a dip from Friday:
- Friday 168
- Saturday 141
- Sunday 145
And then Monday came in at 172. The 'weekend dip' phenomenon became well-established right around the world last year (in Australia it still seems to be 2020). Of more concern than the headline number is that each day the reports also show that the new cases who were out and about in the community while infectious is consistently 50+, which is fuelling the upward trend in infections.
Sydney/NSW is expected to report 200+ cases in the preceding 24 hours according to media reports (we'll have to wait and see).
As a BTW, Commonwealth Bank of Australia analysts have an updated, and dire, outlook for the economy ahead given the shut-in of Australia's largest city:
- Q3 GDP -2.7% q/q
- No recovery until November at the earliest (which therefore threatens Q4 GDP also)
- circa 300K jobs at risk of loss
CBA says the implications for RBA policy are a delay of the planned 'taper' (CBA says it'll be February 2022 at the earliest).
2. Chinese equities are high on the list of worries also. This week's sell-ff has been fuelled by continuing authority clampdowns on firms, this time education and tech firms (tech firms again). And maybe even steel manufacturing. The slide in China is being (partially) blamed for US equity market weakness on Tuesday.
RBA Governor Lowe looks like he swallowed a fly ... which is the least of his worries right now:
