Daily Commentary BY THE CURVE TEAM –

Important Data Tomorrow To Shape Economic Outlook

29th of January, 2019

While not too much happened over the long weekend, there is much to expect over the coming week.

It kicked off on Friday when Trump backed down with a temporary end to the 35-day government shutdown. The President is still prepared to shut down the government again if Congress doesn’t come back with a border wall deal.

In other US news, the WSJ reports that the Fed plans to end its’ QT early next year, instead of in late 2020 or 2021. The recent mixed data and comments by Chairman Powell along with Fed officials sets the scene for an interesting discussion when the Fed meet later this week. Following the meeting, US non-farm payrolls data will be released on Friday night.

Locally, there are some important data releases coming up with the NAB Business Confidence Report released later today.

More importantly, CPI figures for Q4 are set to release for tomorrow. With the run of mostly weak data recently, markets are expecting the inflation rate to be softer than the RBA has forecast. In addition to pressure on the RBA’s growth forecasts, a weak inflation read will also place pressure on the RBA’s inflation forecasts. How the RBA interprets all this data when they meet next week will be key for the monetary policy outlook.

Neyavan Suthaharan

Client Services Officer