Daily Commentary BY THE CURVE TEAM –

Key Data This Week Will Shape Monetary Policy Outlook

18th of March, 2019

After a relatively quiet weekend on the economic front, this week sees the most important data point for the RBA’s monetary policy outlook.

On Thursday, the highly anticipated unemployment data is set to be released. Following the downward trend in the unemployment rate, markets expect it to hold steady at 5%, but see job growth this month dropping from 39.1k the previous month to 15k.

Why the employment data is so key revolves around the fact that a strong labour market is the “central ingredient” for the RBA’s outlook. The RBA have repeatedly emphasised that despite soft figures elsewhere, the labour market strength is likely to offset weakness elsewhere in the economy.

Continuing on the domestic front, we’ll get the RBA’s minutes from their March meeting and the House Price Index, which is tipped to dip even further from 1.5% to 2% QoQ.

Moving offshore, this Thursday morning (local time), the Fed will hold their March meeting. While markets expect the Fed Funds rate to stay on hold in the 2.25%-2.50% band, what will be interesting is whether there are any revisions to the dot plot projections in light of recent mixed data.

Neyavan Suthaharan

Client Services Officer