Markets Overview

HIGHLIGHTS AHEAD.

    On the global front, there is again not much of interest in today’s Europeaneconomic docket. The US diary features this week’s highlights. Wewill be receiving the minutes from the July FOMC meeting. Althoughthis meeting pre-dates China events and latest payrolls, hopefully wewill get some clues on not just the first hike timing but also on therate trajectory going forward. Prior to the minutes, focus will be on CPIdata. Together, both the minutes and CPI data will probably help usshape up expectations of a September rate hike.

    In Asia today (Wed 19 Aug), the focus will be on Malaysia’s July CPIreport, which is expected to rise 2.9%y/y from 2.5% in Jun. Other thanthat, market attention will be on US Fed FOMC meeting minutes from27-29 July for further details on debate for rate normalization.

    CENTRAL BANK OUTLOOK.

    Yesterday’s release of the minutes from the RBA’s August Board Meetingfailed to provide anything new, although the Board’s discussion onthe labour market was of interest. It reinforced the notion that the jobsmarket in Australia was evolving more positively than had been expecteda few months ago. That said, we do not think the minutes havemuch impact on our view that the RBA’s cash rate is likely to remain at2.00% for some time.