9 Jul 2014
Key events on Wednesday - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the key risk events for this Wednesday.
Key Quotes
"The July reading on Westpac-MI consumer sentiment is due at 10:30am Syd/8:30am Sing/HK. The headline index ticked up only 0.2% after its -6.8% slide in May as the federal budget was released. The 93.2 reading compares to an average of 105.5 over the past 20 years. Last week RBA Gov Stevens didn’t sound too worried about the budget effect, noting that “Some surveys do suggest some decline in household confidence of late. It is important, though, to ask how persistent such effects might be.”
"Inflation isn’t causing much concern in China at the moment but there will still be at least passing attention on the June CPI (11:30am Syd/9:30am Sing/HK). Consensus is 2.4% y/y vs 2.5% in May, with the PPI remaining negative at -1% y/y. The China-US Strategic Economic Dialogue talks start today in Beijing. The headlines should be fairly generic, with points of contention left behind closed doors. But there will at least be extra interest in the USD/CNY fixing."
"After a strong performance in weekend TV debates, market choice Joko Widodo is expected to win a fairly close presidential election today, reinforcing this week's rupiah gains."
"The minutes from the 17-18 June FOMC meeting dominate the US calendar. Recall the weighted average Fed fund forecast for 2015/16 rose a fraction while the long term "neutral rate" was reduced. Chair Yellen stuck to a dovish script, noting still significant labor market slack and dismissed recent higher inflation readings as "noisy". A wide ranging discussion around the tools for policy normalisation would have featured prominently too and will likely appear in the minutes. We suspect the minutes will flag heightened inflation risks among the hawks and that policy normalisation may need to begin sooner than expected but the dovish core and their concerns should feature prominently too (i.e. more worried about failure to get the recovery going than a modest inflation overshoot)."
Key Quotes
"The July reading on Westpac-MI consumer sentiment is due at 10:30am Syd/8:30am Sing/HK. The headline index ticked up only 0.2% after its -6.8% slide in May as the federal budget was released. The 93.2 reading compares to an average of 105.5 over the past 20 years. Last week RBA Gov Stevens didn’t sound too worried about the budget effect, noting that “Some surveys do suggest some decline in household confidence of late. It is important, though, to ask how persistent such effects might be.”
"Inflation isn’t causing much concern in China at the moment but there will still be at least passing attention on the June CPI (11:30am Syd/9:30am Sing/HK). Consensus is 2.4% y/y vs 2.5% in May, with the PPI remaining negative at -1% y/y. The China-US Strategic Economic Dialogue talks start today in Beijing. The headlines should be fairly generic, with points of contention left behind closed doors. But there will at least be extra interest in the USD/CNY fixing."
"After a strong performance in weekend TV debates, market choice Joko Widodo is expected to win a fairly close presidential election today, reinforcing this week's rupiah gains."
"The minutes from the 17-18 June FOMC meeting dominate the US calendar. Recall the weighted average Fed fund forecast for 2015/16 rose a fraction while the long term "neutral rate" was reduced. Chair Yellen stuck to a dovish script, noting still significant labor market slack and dismissed recent higher inflation readings as "noisy". A wide ranging discussion around the tools for policy normalisation would have featured prominently too and will likely appear in the minutes. We suspect the minutes will flag heightened inflation risks among the hawks and that policy normalisation may need to begin sooner than expected but the dovish core and their concerns should feature prominently too (i.e. more worried about failure to get the recovery going than a modest inflation overshoot)."