What mattered last week:
- A volatile week for global stock markets as China allowed its currency the Yuan to fall through the key 7.00 level in response to President Trumps latest tariff increase.
- The U.S. responded by labelling China a currency manipulator, before a series of lower than expected CNY fixes calmed nerves and allowed stocks to bounce into the end of the week.
- The RBNZ cut rates by a larger than expected 50bp which resulted in both the NZDUSD and AUDUSD cross rate tumbling to fresh lows.
- The RBA left interest rates on hold, with an easing bias which implies further rate cuts are likely in coming months.
- Gold driven by safe-haven demand rallied over 4% for the week closing above U.S. $1500. The same dynamic sent the stock of negative-yielding debt to an all-time high of U.S. $13.2 trillion.
- The price of iron ore fell 10% last week weighing on ASX heavyweight mining stocks BHP and Rio Tinto, which closed the week down -3.8% and -7.5% respectively.
For the week ahead, the key events are:
Australia: Nab business confidence (Tuesday), Westpac consumer confidence and Q2 wage price index (Wednesday), labour force (Thursday).
- Labour force (Thursday): The market is looking for a 15k rise in July and the unemployment rate to edge up to 5.3%. Underemployment is expected to remain high at 8.2%.
Australian June half earnings report continue this week with reports from companies including JB HiFi, Computershare, Telstra, CSL and Cochlear.
New Zealand: Business NZ PMI.
China: Retail sales, industrial production, fixed-asset investment, new yuan loans and total social financing (Wednesday), house price index (Thursday).
Japan: PPI (Tuesday), capacity utilisation (Thursday).
U.S.: CPI (Tuesday), retail sales, industrial production, capacity utilisation (Thursday), housing starts and building permits (Friday).
- Retail sales (Thursday): Headline retail sales are expected to gain by 0.3% in July. Buoyed by firmer gasoline prices the ex-autos number should rise by 0.4%. The control measure of retail sales (ex-autos, gasoline, building materials) is expected to rise by 0.3%.
There are no Fed speakers scheduled this week.
Canada: Nothing of note.
Euro Area: EA and German ZEW economic sentiment index (Tuesday), EA and German Q2 GDP (Wednesday), EA balance of trade (Friday).
- German Q2 GDP (Wednesday): The expectation is that the German economy shrunk by 0.1% in Q2 as the global slowdown impacted the countries large manufacturing sector.
UK: Labour market report (Tuesday), inflation (Wednesday), retail sales (Friday).
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