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While this reading doesn’t necessarily mean we’ll see a cut anytime soon, it certainly implies we are still a long way from a hike. In fact, it probably suggests there is still downside risk to the economy. At 11.30 AEST we get the RBA’s statement of monetary policy (SoMP) and home loans data, which is expected up 0.6%. This data will also include investment lending and owner-occupier loan value for June. The SoMP will shed more light on the RBA’s views on economic conditions and inflation.
In China, the July trade report is due sometime later today with some suggestions it could be at midday. We will also receive the July PPI/CPI reports on Saturday (our Asian economics team estimates that CPI inflation has nudged up to 2.4% yoy in July). China’s trade balance is expected to shrink with a drop in exports and imports. All these releases will be pivotal to how the AUD plays out in the near term. Should the SoMP manage to calm things, we could actually see a near-term pop in AUD/USD before further weakness.