Daily Commentary BY THE CURVE TEAM –

Plenty of Action Across Politics, Markets and Data to Start the Week

17th of July, 2018

It has been a huge start to the week with plenty happening over the past 24 hours in politics, market moves and data. It will continue today, with the RBA minutes from the July meeting which will be worth a close look when they are released at 11:30.

Trump remains in the news as he headed to a summit in Helsinki, Finland and had a meeting with Russian President Vladamir Putin. There are plenty of reports on what was discussed and said at the subsequent press conference but all you need to know is Trump managed to ruffle more feathers. His comments are likely to prompt a backlash from both sides of politics in the US.

In the UK, Brexit is looking more like a slow motion train wreck with the probability of a hard Brexit increasing by the day. The PM Theresa May is struggling to maintain momentum while the EU are growing tired of the situation. They may grant the UK an extension but are unlikely to cave to their demands.

Data over the past 24 hours has been interesting. Chinese GDP held up remarkably well given that the data dump of economic activity indicators continues to point to a slowdown. Meanwhile data in the US remained solid with retail sales, the empire manufacturing index and exisiting home sales all beating expectations.

The data and what it means for monetary policy in the US will likely feature prominently when Federal Reserve Chairman Jerome Powell heads up Capitol Hill for his Semi Annual Testimony. He is likely to reiterate that rates are still headed higher despite risks to the outlook.

Monetary policy will also be in focus in Australia today with the release of the RBA’s July board meeting minutes. It will be worth a look to see what was discussed ahead of the upcoming Quarterly Statement on Monetary Policy due early August.

David Flanagan

Director - Interest Rate Markets