A further slowing in growth
AUD/USD outlook revised up.
AU/NZ. AU: The RBA meets on Tuesday, where it is almost certain the bank will keep monetary policy and its policy guidance unchanged. The post-meeting statement may provide some detail on the bank’s revised economic forecasts, to be formally released on Friday in its Statement on Monetary Policy. The bank is likely to upgrade its near-term outlook on the back of better data, but still expect a slow recovery in activity, unemployment and inflation. Retail sales data on Tuesday should show real retail spending fell in Q2 by 1.4% q/q, taking ¼ pp from Q2 GDP. NZ: For Wednesday’s Q2 labour market reports, we forecast 5.9% for the unemployment rate (from 4.2% in Q1), a 2.1% quarterly decrease in employment, and a drop in the participation rate to 69.8%, from in 70.4%.
Global. CH: the services Caixin PMI may hint at a broadening in the recovery after the industrial-led rebound. US: All eyes remain on whether a new fiscal package can be agreed to, particularly the extension of the $600 a week unemployment benefit supplement. July non-farm payrolls are due Friday where 1.5m jobs are expected to be created (but where the range of estimates is a wide -1m to +3.3mn). EU: As COVID-19 shows signs of reappearing in selected European cities, markets will keep a wary eye on whether these outbreaks can be kept under control. UK: The BoE meets on Thursday, but no changes are expected to rates or QE.
AUD/USD medium-term model in line with spot.
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